Park plays hardball on Kumho Tire

Kumho Asiana Group Chairman Park Sam-koo said he won’t transfer rights to the trademarks of Kumho Tire to Doublestar, currently the top bidder for the local tire manufacturer.

Park’s move is seen as his final attempt to defeat an acquisition by the Chinese tire company, according to industry insiders.

Doublestar signed a stock purchase agreement with the tire company’s main creditor, Korea Development Bank, last month. But several issues need to be ironed out, including trademark rights, delaying the maturity of the tire company’s loans and approval by the Korean government.

If the remaining issues are not settled within the next five months, Doublestar loses its rights as top bidder and the right of first refusal that Park withdrew on April 18 returns to him. The tender process will start all over.

Trademark issues have been the biggest headache for the Chinese company.

Currently the right to use the tire company’s brand name is held by Kumho Industrial, the holding company of the Kumho Asiana group.

Kumho Tire has been paying roughly 0.2 percent of its annual revenue or about 6 billion won ($5.28 million) as a trademark usage fee to the group. It renews a trademark usage contract every year.

In a recently held board meeting, Kumho Industrial extended the trademark contract until the end of next April but added a clause that says, “Changing terms of the deal or cancelling the contract is possible during the contract period.”

Doublestar has been demanding rights to use the brand name for the same 0.2 percent rate of revenue for 20 years. Park’s announcement is a direct rebuttal.

“It is senseless to allow Doublestar to use Kumho Tire’s trademark for 20 years under the current usage rate,” Kumho Asiana said in a statement Friday, “and also let it close the deal at any time it wants.”

The group added that negotiations are possible on its creditors’ request but if no consensus is reached, the group can completely ban the use of the brand name.

While Park had a right to reacquire the group’s former tire subsidiary, he withdrew it on April 18 as creditors of the tire company, led by the state-run Korea Development Bank, declined his request to form a consortium to buy back the company. He couldn’t afford the acquisition by himself.

Analysts say Park is waiting for the deal with Doublestar to fall apart so he can have another shot at the tire unit.

BY KIM JEE-HEE, PARK EUN-JEE [kim.jeehee@joongang.co.kr]