57.4% of Kumho Industrial for sale

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57.4% of Kumho Industrial for sale

With creditors of Kumho Industrial putting their majority stake up for sale, analysts are watching to see if Kumho Asiana Group Chairman Park Sam-koo will get the shares.

On Friday, creditors including Korea Development Bank, issued a sales notice for their 57.4 percent stake in Kumho Industrial, the de facto holding company of Kumho Asiana Group. Creditors acquired the shares when the conglomerate was suffering a liquidity crunch in late 2009.

Creditors will accept letters of intent by Feb. 25 and plan to select a buyer this summer.

Kumho Asiana has been saying it will secure the stake that is up for sale, which is critical for managing the entire group. Kumho Industrial is the largest shareholder of the country’s No. 2 air carrier, Asiana Airlines, which has Kumho Terminal, Air Busan and Kumho Resort as affiliates.

The price of Kumho Industrial shares went up 7.55 percent to 29,200 won ($26.55) after creditors issued the sale notice.

Under a previous deal with the creditors, Chairman Park has a first option to purchase the shares. Since Park and his son Park Se-chang, who is vice president of Kumho Tire, already have a 10.15 percent stake in Kumho Industrial, the Park family can secure management control by acquiring an additional 40 percent.

The question is whether the Parks have enough money. Industry insiders speculate Park can raise about 200 billion won, but the price of the stake up for sale is estimated at 500 billion won. If competition heats up, some analysts say it could reach nearly 1 trillion won.

“We have been running a task force team on this issue,” said an official from Kumho Asiana.

Industry observers are wondering whether Hoban Construction will make a bid.

The midsize construction company last year acquired a 6.16 percent stake before selling 1.21 percent on Jan. 23. The company is estimated to have more than 300 billion won of liquid assets.

“The reason we bought Kumho Industrial shares was for investment purposes, not for management power,” said an official from the construction company.

Park also is under pressure to buy back shares of group affiliates coming out of debt workout programs.

BY JOO KYUNG-DON [kjoo@joongang.co.kr]
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