Kumho Tire creditors to begin sale process on Sept. 20

Published : Aug 30, 2016 - 10:15 Updated : Aug 30, 2016 - 10:16

[THE INVESTOR] The sale process for Kumho Tire will begin in September, industry sources said on Aug. 30.

The tire maker’s creditor banks plan to announce the sale on Sept. 20, and receive preliminary bids mid-November. The banks expect the final bids to be submitted by around January 2017.

The bid is for 42.1 percent of the company held by Woori Bank, Korea Development Bank and other financial institutions.

The booth of Kumho Tire at Tokyo Auto Salon 2016 displays a racing car fitted with the firm’s UHP tires and various tire solutions. Kumho Tire

At Aug. 29 closing price of 10,300 won (US$9.21), the creditors’ stakes are valued at over 650 billion won. However, market watchers say that the actual sale price is likely to be much higher considering that acquiring the creditors’ stakes would give the buyer control over the company.

As the creditors gear up to sell the tire maker, interest is rising over whether Kumho Asiana Group Chairman Park Sam-koo will exercise his pre-emption rights.

Park has pre-emption rights, which cannot be transferred to a third party, but some in the industry say that he may lack liquidity due to his acquisition of Kumho Industrial for 722.8 billion won last year.

By Choi He-suk (cheesuk@heraldcorp.com)