SEOUL, Aug. 30 (Korea Bizwire) — The chairman of Kumho Asiana Group, parent of Kumho Tire Co., on Wednesday submitted a revised proposal to creditors over the use of the tiremaker’s brand, an industry source said Wednesday.
The revised proposal by Kumho Asiana Chairman Park Sam-koo came as the creditors, led by state-run Korea Development Bank (KDB), remains undecided on a demand by China’s Qingdao Doublestar Co. to cut its bidding price for Kumho Tire.
Details of the revised proposal were unknown, but Kumho Asiana had requested Doublestar to pay 0.5 percent of its sales as a brand usage fee for 20 years.
Doublestar signed a deal with the creditors in March to buy a 42.01-percent stake in Kumho Tire for 955 billion won (US$849.3 million).
After months of bitter dispute over the use of Kumho Tire’s brand, the Chinese company submitted documents earlier this month for approval from the South Korean government in what appeared to be a final step to complete the acquisition.
However, Doublestar has 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.
If the creditors accept Doublestar’s demand, it would allow Park to exercise his right to buy back the tiremaker. Also, the creditors need to renegotiate with Doublestar over the usage fee of the Kumho Tire brand.
The KDB was conducting a legal review of the revised proposal by Park, according to the source.