Kumho chief pursues group rebuilding

Kumho Asiana Group chairman Park Sam-koo is seeking to bring his group back together by re-acquiring Kumho Buslines and Kumho Tire, which had been sold off in an effort to reduce their debt.

According to Kumho Asiana Group on Monday, Park decided to rebuy the 100 percent stake in express bus operator Kumho Buslines that was sold to Germany-based private equity firm Consus KHB last year by Kumho Terminal for about 390 billion won. 

That transaction came just three months after the group had bought back Kumho Buslines in June.

Kumho Terminal is a subsidiary of Kumho & Company, the holding company of the entire group. It is likely to be the buyer of Kumho Buslines when the transaction is complete later this year.

When Kumho Terminal sold Kumho Buslines, it acquired a call option allowing it to buy back the shares within two years and three months.

The group is expected to pay approximately 400 billion won for the shares.

The scheduled purchase is the latest in Kumho Asiana Group‘s moves to piece back together the financially troubled group. Last year, Park began the process by buying back Kumho Industrial through a stock purchase agreement.

After the acquisition of Kumho Buslines this year, the group is expected to bid to buy back Kumho Tire, another key company in its group. Kumho Industrial, Kumho Tire and Asiana Airlines represent the three major legs of Park‘s business empire.

Creditors holding shares of Kumho Tire are expected to put up their 42-percent stake as early as September. Credit Suisse was appointed by creditors to sell the stake in the company.

According to a Kumho Asiana spokesman, many “large investors abroad” have shown interest in the tire maker, which holds strong production plants in the U.S. and China.

With the Chinese auto market expected to grow quickly in coming years, Kumho Tire is a tempting sale for global firms who want to increase their influence in China.

However, chairman Park holds the preemption right on the stake, meaning that if he can find the funds to match the highest offer, he can buy back Kumho Tire.

Currently, it is unclear how Park will be able to pull together the funds following the acquisition of Kumho Industrial last year. It is more likely that he will bring in investors to form a consortium to bid on the company.

The sale, which is currently estimated by industry watchers to reach about 1 trillion won including management rights, will take bids in January next year.

Creditors will announce the sale price after analyzing the company‘s value in August.

By Won Ho-jung (hjwon@heraldcorp.com)