Kumho Holdings buys back bus serviceKumho Holdings, the holding company of Kumho Asiana Group, has reacquired Kumho Buslines.
The company said Friday it exercised the call option to buy back 100 percent of the shares of the bus company for 437.5 billion won ($383.7 million). Kumho Buslines previously was owned by Consus PEF.
“Kumho Buslines is the parent company of Kumho Asiana Group and we were able to secure the foundation to rebuild the group,” said a spokesperson for Kumho Asiana. “Through the acquisition of Kumho Buslines, we believe the profitability and financial soundness of the holding company will be improved.”
Kumho Buslines is an intercity transportation service provider founded in 1948. Last year, the bus company had 375.4 billion won in revenue and 46.7 billion won in net profit.
The group sold Kumho Buslines in 2012 while it was experiencing a liquidity crunch. Park Sam-koo, chairman of Kumho Asiana Group, exercised his right of first refusal and acquired the company in 2015. But the group quickly resold the company to Consus to raise capital for the acquisition of Kumho Industrial.
Kumho Tire is the last piece of the puzzle in rebuilding the company. The second largest tire company in Korea currently is at the center of conflict between the group and creditors. Park started his career in 1967 with the company’s tire unit.
The group lost the control of beleaguered Kumho Tire in 2009. Right now, the main bidder to buy the tire company is Doublestar, a Chinese tire producer. While the group of creditors led by Korea Development Bank tried to complete the sale of Kumho Tire, Park and Kumho Industrial resisted. Earlier this month, Park and Kumho Industrial raised the trademark fee required to pay for using Kumho brand from the initial 0.2 percent to 0.5 percent.
Analysts remain skeptical that the move to buy back Kumho Buslines will have any impact in Park’s attempt to take back Kumho Tire.
“Kumho Asiana bought back Kumho Buslines despite the shortage in capital,” said Park Jae-il, an analyst at Taurus Investment and Securities. “And recovery of the bus company seemed nothing to do with the company’s attempt to acquire Kumho Tire, which is highly unlikely for the group now.”
The creditors of Kumho Tire, including the KDB, gave an ultimatum to Park and Kumho Industrial, saying if the deal with Doublestar falls through, they will provide no additional support to the tire company. Creditors have injected nearly 4 trillion won since 2010.
BY CHOI HYUNG-JO [firstname.lastname@example.org]