Kumho Holdings merges with group’s bus company
Kumho Asiana Group’s holding company Kumho Holdings finalized a merger with Kumho Buslines, an intercity transportation service provider, on Monday.
The group has been pursuing the merger to add liquidity to the holding company, which has been suffering from a high debt rate. Kumho Buslines is considered a stable cash generator among Kumho-titled affiliates. Last year it posted 401 billion won ($368 million) in revenue and 47.9 billion won in operating profits. Industry observers say the company will reap roughly 40 to 50 billion won operating profits annually.
The merger also grants Kumho Asiana Chairman Park Sam-koo more control over the group. Park controls Kumho Industrial and Asiana Airlines through Kumho Holdings. A spokesperson from Kumho Asiana Group said the group will strive to improve the shareholder value of other affiliates such as Kumho Industrial. The group denied industry speculations that Kumho Industrial will merge with Kumho Buslines. The group had tossed around the bus company several times.
After selling the bus unit in 2012 due to a liquidity crunch, the group bought it back in 2015. Kumho then quickly resold the company to a private equity fund to raise capital for the acquisition of Kumho Industrial.
BY KIM JEE-HEE