SEOUL, Sept. 12 (Korea Bizwire) – China’s Qingdao Doublestar has sent a copy of legal documents to the creditors of Kumho Tire, saying it agrees to cancel a deal to buy a controlling stake in the South Korean tiremaker, an official at a key creditor bank said Tuesday.
The official at the state-run Korea Development Bank (KDB) said the bank requested Doublestar send the original documents by Wednesday to review whether they are legally valid.
If the validity of the documents is confirmed, KDB will likely announce a formal cancellation of the deal to sell Kumho Tire to Doublestar on Wednesday, the KDB official said on the condition of anonymity.
Doublestar signed the 955 billion-won (US$845.4 million) contract with creditors in March to buy a 42.01 percent stake in Kumho Tire.
After months of a bitter dispute over the use of Kumho Tire’s brand, the Chinese company submitted documents in early August for approval from the South Korean government in what appeared to be the final step in completing the acquisition.
However, Doublestar demanded the creditors cut the price by 16 percent to 800 billion won, adding a new twist to the Chinese firm’s bid to acquire Kumho Tire.
Last week, Kumho Tire’s creditors decided to reject Doublestar’s demand to cut the price.
Besides the price, the creditors and Doublestar have remained far apart on other issues, including job security for Kumho Tire employees.