The process to sell South Korea’s Kumho Tire has returned to the starting point as the Chinese preferred bidder is demanding new buyout term that would give former owner Park Sam-koo, chairman of Kumho Asiana Group, a chance to rebid to get the country’s second largest tire maker back under the parent group.

Qingdao-based Doublestar Tyre recently asked the creditors group led by Korea Development Bank (KDB) and Woori Bank to cut the price tag for their combined 42 percent stake in the bigger Korean rival from 955 billion won ($832 million) signed off in March. The Chinese preferred bidder has the right to call off the deal if operating profit of Kumho Tire falls more than 15 percent by the Sept. 23 deadline for the deal to be sealed.

The deal has been stalled because Kumho Asiana Group refused to hand over the trademark rights in the tire maker and demanded stricter terms for use of the Kumho brand. Kumho employees and residents of Gwangju, the manufacturing base of the tire marker, also have been protesting hard about their company falling under smaller Chinese competitor

Overseas clients turned back amid protracted uncertainty about Kumho Tire’s future. The company reported an operating loss of 28.2 billion won in the first quarter and 22.5 billion won in the second, compared with a surplus of 40.7 billion won a year ago due to snowballing losses in its Chinese operation.

The state lender and other creditor banks eager to offload the loss-making company plan to accept the new term from the Chinese bidder. A renegotiation automatically revives the right of first refusal, the priority to buy back the company at the same price as the preferred bidder should it be placed on sale, in Park Sam-koo and his eldest son Se-chang.

Park has been asking creditors to allow him to form a consortium of investors to retrieve the tire maker his father had founded - the same term as the Doublestar. Kumho Tire

Shares of Kumho Tire closed Friday at 6,710 won, down 370 won or 5.23 percent from the previous sesssion.

By Kim Jung-hwan and Chung Seok-woo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]