Creditors of Kumho Tire Co. have decided to accept the offer by the tiremaker's parent group in a brand dispute with the Chinese buyer, clearing the final hurdle in the sale of South Korea's No. 2 tiremaker, an official the main creditor said Friday.
In March, China's Qingdao Doublestar Co. signed a 955 billion won ($852 million) deal to acquire a 42 percent stake in Kumho Tire, but the process of acquisition hit a snag over how much Kumho Tire should pay for the use of the Kumho brand name.
Kumho Asiana Group, Kumho Tire's parent group, has demanded that Kumho Tire pay 0.5 percent of its sales as a brand usage fee to Kumho Asiana Group for 20 years.
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(Yonhap) |
Under the agreement approved by more than 75 percent of creditors of Kumho Tire, the tiremaker is required to pay 0.2 percent of its sales as a brand usage fee to Kumho Asiana Group for 20 years, an official of the state-run Korea Development Bank.
The official also said the creditors would give 0.3 percent of Kumho Tire's sales to Kumho Tire, which then pay the money to Kumho Asiana Group.
Given that Kumho Tire has annual sales of about 3 trillion won, the difference of 0.3 percentage point was estimated to be some 9 billion won, according to creditor bank officials.
The creditors' decision would remove obstacles in the sale of Kumho Tire to Qingdao Doublestar, the official said. (Yonhap)
