Kumho Asiana’s Park, KDB spar over tire dealKumho Asiana Group’s chairman, Park Sam-koo, will give up his right of first refusal to buy back the conglomerate’s former subsidiary Kumho Tire if its main creditor, Korea Development Bank, does not decide by Monday whether to allow Park to form a consortium to pursue the deal.
Kumho Asiana Group is said to have sent the request to Korea Development Bank on Wednesday.
Korea Development Bank, meanwhile, has issued Park its own ultimatum, giving him until next Wednesday to submit more details on how he will form a consortium, who will be involved and how much money they will deliver.
Kumho Asiana Group fired back, arguing that no investor would want to join a consortium if creditors do not definitively allow one.
In January, Korea Development Bank signed an agreement with Chinese tire company Doublestar to sell a 42.01 percent stake in Kumho Tire for 955 billion won ($843 million). Park, who holds the right of first refusal and has sought to buy back the tire subsidiary after losing it in 2009 in a liquidity crunch, can repurchase the company if he can match Doublestar’s offer.
Park has argued that he cannot cough up the money without forming a consortium. Creditors refused, saying the right of first refusal belongs to Park alone.
“Doublestar was allowed to form a consortium in the bid despite having contributed nothing to stabilize the management status of Kumho Tire,” Kumho Asiana Group said in a statement, criticizing the stance as “contradictory.”
Park received right of first refusal in 2012 after he chipped in 113 billion won from his own coffers to prop up Kumho Tire.
Even if Park voluntarily gives up his right of first refusal, he might have a second chance to exercise it. Sources say the contract signed between him and Kumho Tire creditors includes a clause that can revive his right of first refusal if Kumho Tire’s acquisition is not finalized six months after he first gives up the right or when it expires.
BY SONG KYOUNG-SON [firstname.lastname@example.org]