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Kumho Industrial creditors reject sole bidder’s offer

The fate of Kumho Industrial, the de facto holding firm of Kumho Asiana Group, is up in the air as creditors rejected the sole bidder’s price offer to acquire a controlling stake.

On Tuesday, Korea Development Bank, the lead manager of the stake sale, and creditors of Kumho Industrial decided not to accept the final bid of 600.7 billion won ($561 million) made by Hoban Construction for a 57.5 percent stake, saying it was much lower than expected.

Industry watchers have estimated the cost of acquisition to soar to 1 trillion won as the deal would also give the winner control of two airlines ― Asiana Airlines, the nation’s second-largest air carrier, and Air Busan, Asiana’s low-budget affiliate.

In March, Hoban Construction founder and chairman Kim Sang-yeol said his firm was in a position to bid 1 trillion won with the builder’s financial soundness and sufficient cash flow.

With the latest bidding nullified, there are two options for the creditors ― issue a fresh tender or carry out a private contract with Kumho Asiana Group chairman Park Sam-koo, who has the first rights of refusal for majority stake in Kumho Industrial. The creditors will announce their next move after May 5.

“I will wait until the creditors make a final decision,” Park was quoted as saying by The Herald Business.

By Park Han-na (hnpark@heraldcorp.com)
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