Korea Development Bank (KDB) and other creditors of cash-strapped Kumho Tire Co. have decided to renew the process to seek a new owner for South Korea’s second-largest tire maker four months after its planned sale to Chinese competitor collapsed.

According state-run KDB on Thursday, Kumho Tire creditors concluded on Thursday that the best option to turn around the tire maker is inviting outside capital after reviewing various measures including creditors-led workout program and a P-plan - a mixture of court and creditors relief program.

Following the decision, the creditors are expected to issue new shares of Kumho Tire to a third party to increase capital. Industry sources speculated that the creditors must have made the latest decision after a potential buyer showed interest about the share purchase.

To make the new stock sale successful, the creditors have decided to roll over Kumho Tire’s debts by one year and cut interest rates.

Last year, the creditors tried to sell the cash-deprived tire make to Chinese tire maker Doublestar Tyre but the planned sale officially fell through in September. Kumho Asiana Group Chairman Park Sam-koo in November also announced that he decided to give up his longtime wish to win back Kumho Tire, giving creditors full authority to save the troubled tire maker. Park and Kumho Asiana Group had interrupted the sale of Kumho Tire to the smaller Chinese rival before the 955 billion won ($892.5 million) deal officially broke off.

Since the sale deal was called off, the creditors and the company have been seeking ways to normalize its business. Kumho Tire’s labor and management are currently at odds over a voluntary self-rescue plan proposed by the company. The management has proposed its unionized workers to agree on its plan to freeze wages and adopt a salary peak system while the company is seeking to turn around the business.

The labor union, however, have been standing against the plan and have threatened to stage a strike next week, demanding the management scrap its voluntary self-rescue and restructuring plan.

Kumho Tire creditors have notified the troubled tire maker that sufficient voluntary efforts are essential for business normalization.

By Lee Seung-yoon and Lee Eun-joo

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