Kumho group head voices willingness to take back tire unit

By Lim Chang-won Posted : September 6, 2017, 14:06 Updated : September 6, 2017, 14:06

[Kumho Tire]



Kumho Asian Group chairman Park Sam-koo is under pressure to present a self-rescue package for Kumho Tire, but he appealed for help from creditors to bail out the troubled tire maker after its sale to a Chinese company was made implausible.

Park promised to do his best in working out an effective self-rescue plan as demanded by creditor banks which have cast doubts about his financial ability. 

Doublestar signed a share purchase agreement in March with creditors to secure a controlling 42.01 percent stake in Kumho Tire for 955 billion won (842 million US dollars). But the deal has not been closed because of disputes over job security, the use of Kumho's brand and other thorny issues.

The Chinese company has insisted on a price cut by 16 percent to 800 billion won, citing Kumho Tire's operating loss. Creditors rejected it in a decision on Tuesday. There have been no official words from Doublestar, while Park expressed his willingness to take back the tire unit.

"I will do my best," the chairman told reporters on Wednesday. "Normalization is impossible without help from creditors."

Kumho Tire with plants in China, Vietnam, and the United States was put under a debt workout program in December 2009 due to a severe liquidity crunch. The company graduated from the program in late 2014, but sales fell sharply in China this year amid a row over the deployment of a Terminal High Altitude Area Defense (THAAD) battery in South Korea.

Park has been accused of causing Kumo Tire's liquidity crisis with mismanagement. He admitted he should take responsibility but said the crisis was aggravated by a THAAD dispute. Creditors still regard Doublestar as a viable option to normalize Kumho Tire's operation. "Kumho Tire's management crisis is likely to become a reality, so we will seek ways to overcome it," a creditor bank official said.

Community people have supported Park's claim that Kumho Tire should not be turned over to a foreign company especially from China. Trade Minister Paik Un-gyu has expressed concern about technology spills and a negative impact on the regional economy.


 
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