Chairman of Kumho to reacquire bus companyKumho Asiana Group will reclaim Kumho Buslines three years after it sold it to a private equity fund as part of a debt workout.
Group Chairman Park Sam-koo will exercise a right to buy a stake of Kumho Busline from IBK Securities-Keistone Partners (or IBK Fund), which currently owns all shares in the transport company, according to the company Monday.
Park has been saying he wants to buy back the company because the entire group was founded on Kumho Buslines after his father, Park In-cheon, established it in 1946.
IBK Fund proposed a selling price for the company on Feb. 17. The price wasn’t revealed by either side, but is expected to be about 500 billion won ($450 million). Kumho Group has been carefully considering whether it should exercise its rights to buy the stake. Industry insiders say Kumho will likely attempt to buy the stake for under 500 billion won.
According to industry sources, Park has about 150 to 200 billion won worth of liquid assets, meaning that it might partner with a friendly co-investor such as the Military Mutual Aid Association.
When Kumho Tire was up for sale in 2003, the military association purchased a 70 percent stake and later sold 32.14 percent to Park.
Daesang Group also is considered a potential investor because Park Hyun-ju, vice chairwoman of Daesang Holdings, is a younger sister of the Kumho chairman.
But there are concerns over whether Kumho Group really needs the transportation company. Kumho has been attempting to rebuild by buying back affiliates it lost in 2009.
Along with the transportation company, it is trying to buy back Kumho Industrial, which is considered the biggest M&A target in the first half of this year.
Kumho Industrial is the majority shareholder of Asiana Airlines, the country’s second-largest carrier. Ownership of the company would include management rights to Kumho Asiana Group’s many affiliates. The company owns 30 percent of Asiana Airlines and 100 percent of Kumho Terminal, Asiana Airport Development and Asiana IDT, an IT company. The estimated cost of acquiring Kumho Industrial is 500 billion won to 1 trillion won.
Kumho Buslines averages a profit margin of 10 percent of revenues, but that might fall when a KTX line connecting Seoul and Gwangju opens next month.
BY KWON SANG-SOO [email@example.com]