Kumho Tire creditors ask for plan

The creditors of Kumho Tire, the second-largest tire company in Korea, decided on Tuesday to wait for Kumho Asiana Group Chairman Park Sam-koo to provide detailed plans for his consortium before allowing him to buy back the tire company.

A group of creditors led by the state-run Korea Development Bank rejected Park’s request to create a consortium and said they would reconsider if he submits a more detailed plan. Kumho Asiana has said the buyback is only financially feasible if it’s done with a consortium.

Park must submit the plan by April 13, the deadline for him to exercise his right of first refusal.

“It all comes down to whether the details of the plan - such as how the consortium will deliver the necessary funds and the size and credibility of the companies included - satisfy the creditors” a KDB official said, requesting anonymity in order to speak candidly on the matter. “How Chairman Park will create the portfolio of the consortium will be reviewed closely.”

KDB owns 32.2 percent of shares in Kumho Tire, and private-sector Woori Bank owns 33.7 percent.

If Park doesn’t come up with a satisfactory plan to turn shareholders around, Kumho Tire, a major supplier of tires to the Korean military, will likely be sold to Chinese tire manufacturer Doublestar. The company bought a 42.01 percent stake in Kumho Tire earlier this year with 955 billion won ($858 million) and is currently a preferred bidder of Kumho Tire.

“We decided not to set a specific date for when Park should submit the plan as a sign that we will be firm on our stance in the matter,” the KDB official said, hinting that the bank could maintain its opposition to Park’s reacquisition of the tire maker.

Kumho Asiana Group lost the right to manage Kumho Tire in 2009 after a severe liquidity problem.

If creditors reject Park’s consortium plan, he can take the case to local court in a last-ditch effort.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]