Kumho Industrial attracts single bid

Home > Business > Industry

print dictionary print

Kumho Industrial attracts single bid

Kumho Industrial, the crucial affiliate of Kumho Asiana Group, is likely to be handed to a new owner after Hoban Construction submitted the only bid.

With Hoban the sole contender, a clash with the airline group’s founding family and Chairman Park Sam-koo seems inevitable as Park has been trying to reclaim what once was his.

The biggest question will be whether Park can match the price the construction company has offered for the controlling stake.

According to Kumho Industrial’s main creditor, Korea Development Bank (KDB), on Tuesday, the construction company was the sole bidder by the 3 p.m. Tuesday deadline. KDB said it will hold a meeting with other creditors today before naming the construction company as the primary negotiator on May 3.

Although no details of the proposal by Hoban Construction have been revealed, it is rumored the acquisition of a 50 percent stake in Kumho Industrial could cost 600 billion won ($561 million) to 1 trillion won.

Kumho Industrial has a key role in the governance of Korea’s 17th-largest conglomerate, excluding state-owned companies. Total assets of the airliner conglomerate are 18.2 trillion won with 26 affiliates under its command. Kumho Industrial is the de facto holding company of the conglomerate and owns 30.8 percent of the group’s flagship Asiana Airlines and 100 percent of other affiliates, including Kumho Terminal, Asiana Airport Development and Asiana IDT.

Hoban Construction is not listed among the nation’s 50 leading conglomerates. Although small, Hoban is said to have solid finances and roughly 400 billion won in assets that could easily be liquidated. There have been rumors of Hana Financial Group backing the construction company by providing 400 billion won for acquisition of the controlling stake.

For Chairman Park, who controls a 10.15 percent combined stake in Kumho Industrial, including the 5.1 percent owned by his son and vice president of Kumho Tire Park Se-chang. He would need to secure an additional 40 percent to protect his management rights. Park has the right to equal Hoban’s offer and purchase the shares.

KDB put up Kumho Industrial’s controlling 57.4 percent stake for sale in January.

Kumho Industrial shares gained for the second consecutive day, reflecting hype over the potential sale. Kumho Industrials shares rose 1.56 percent to close at 22,850 won on Tuesday.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)