Creditor banks will receive final bids to sell stake in Kumho Tire

Creditor banks will receive final bids to sell Kumho Tire Co., South Korea’s second-biggest tire company by sales, this week, the main creditor bank Korea Development Bank said Wednesday.

One Indian and four Chinese firms have submitted preliminary bids, according to a person with direct knowledge of the deal. Nine creditors hold a combined 42.01 percent stake in Kumho Tire, with Woori Bank and KDB holding 14 percent and 13.5 percent, respectively.

Kumho Tire exited a debt rescheduling program in 2014, which it entered five years earlier because its parent Kumho Asiana Group was hit hard by a severe liquidity crunch from the purchase of Daewoo Engineering and Construction Co.

Kumho Asiana Chairman Park Sam-koo holds a key in the stake sale as he has the “right of first refusal,” which gives its holder the option to enter a business transaction with the owner of the stake, according to specific terms.

He can exercise the right should he accept the offer price from the creditors, which could reach around 1 trillion won ($833 million).

Park, who holds no stake in Kumho Tire, said in his message for the new year that he wanted to take over Kumho Tire.

From January to September, Kumho Tire’s net losses widened to 54.9 billion won from 32.97 billion won a year earlier. YONHAP