Chinese firm named as top bidder for Kumho Tire

Creditors of Kumho Tire named China’s Doublestar Tyre as preferred bidder for a 42.01 percent stake in Korea’s second largest tire producer on Wednesday.

“A committee consisting of creditors of Kumho Tire selected Doublestar Tyre as the preferred bidder,” Kumho Tire announced in an electronic disclosure late Wednesday.

A source at Korea Development Bank, the company’s main creditor, said Doublestar offered to pay around 1 trillion won ($857.8 million) for the stake.

Three creditors of Kumho - the KDB, Woori Bank and KB Kookmin Bank - gathered to choose the Chinese tire maker yesterday after KDB sent a statement requesting approval Tuesday, the source confirmed.

Two other Chinese companies - Shanghai Aerospace Industry and Jiangsu GPRO Group - also made bids.

The attention now shifts to Park Sam-koo, chairman of Kumho Asiana Group, and to whether he will attempt to buy back the tire maker using his right of first refusal. If exercised, it gives him the right to recover management control if he pays the same price offered by the preferred bidder before anyone else.

KDB plans to sign a purchase agreement with Doublestar Tyre by next month and then ask Kumho chairman Park whether he will buy back the company. He has a month to make a decision after getting a notice from the creditors.

Kumho Asiana Group lost control of Kumho Tire and Kumho Industrial after both affiliates filed for a debt workout program in 2009. The group went through a severe liquidity crunch after purchasing Daewoo Engineering and Construction. In 2010, creditor banks ended up with 42.01 percent of Kumho Tire through a debt-equity swap.

Park has expressed a strong intention to get Kumho Tire back. “Acquiring Kumho Tire to finalize the rebuilding of the group remains our homework,” he said in a New Year’s message.

Park reiterated his intention to buy back the company on Tuesday when he met reporters at the headquarters of Kumho Asiana in Gwanghwamun, central Seoul.

But Park’s personal assets fall short of the expected bid price of 1 trillion won. Creditors have prohibited Park from financing a deal through group affiliates or transferring his first refusal rights to a third party.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]