Kumho Asiana Group buys back Kumho Industrial

Kumho Asiana Group chairman Park Sam-koo signed a deal to buy back controlling stake in the de facto holding firm of the group from creditors for 722.8 billion won ($605.96 million), six years after he lost control.

The group announced Thursday that it entered into a stock purchase agreement to acquire Kumho Industrial -- the key firm of the group’s governance structure -- after a months-long tussle over the sale price with creditors. The creditors initially proposed 1.2 trillion won for the takeover deal.

With the acquisition of 50 percent plus one share in Kumho Industrial, the group’s chairman will return as the largest shareholder of the builder that came under creditors’ control in 2010 when its parent group ran into financial trouble after paying some 10 trillion won for acquisitions in 2006 and 2008.

“I will take the acquisition as the last chance and work with a renewed mind to contribute to the country’s economic development,” the 70-year-old chairman said.

Park should submit a funding plan to Korea Development Bank, the main creditor, within a month and make full payment by Dec. 30.

If the transaction fails, the chairman needs to pay 5 percent of the sale price, or 36.1 billion won, as penalty for breaching the contract.

“There are investors who are helping me get funding. I will make thorough preparations as there is sufficient time left (until the payment is due),” he said.

Park is expected to join hands with other strategic and financial investors, such as domestic retail giants Shinsegae, CJ and Nonghyup Bank, to fund the multibillion-won deal, according to sources familiar with the matter.

The contract was signed only a day after creditors informed Park of the final price tag, showing the chairman’s desperation to restore his business empire with the three pillars of his group -- Kumho Industrial, Asiana Airlines and Kumho Tire.

Kumho Industrial has a 30.08 percent stake in Asiana Airlines, South Korea’s second-largest airline.

Asiana Airlines has a 100 percent ownership stake in the crown jewels of the group -- Kumho Terminal, Asiana Airport and Asiana IDT -- as well as a 46 percent stake in budget carrier Air Busan. Kumho Tire, with its 42.1 percent stake held by creditors, is expected to be go on sale next year.

By Park Han-na (hnpark@heraldcorp.com)