The state-run Korea Development Bank (KDB) said Monday that it will sell a local tiremaker to a Chinese firm unless the chief of Kumho Asiana Group exercises his right to buy back the logistics conglomerate's tiremaking affiliate currently under creditors' control.
Park Sam-koo, chairman of Kumho Asiana Group, has urged the KDB, the main creditor of Kumho Tire Co., to allow him to form a consortium for the potential takeover.
But the KDB said Park is required to show his intention by Wednesday, if he wants to take back the country's No. 2 tiremaker.
The lender believes Park may face difficulties getting the necessary funding.
The creditors, led by the KDB, also said they would review whether to allow Park, the chief of the logistics conglomerate, to exercise his right to buy back the tiremaker after receiving a plan for the purchase, which they have requested.
Earlier, Park asked the KDB to reply to his inquiry over the formation of a consortium by no later than Monday.
The business leader added that he would take legal action against the creditors of Kumho Tire for denying his lawful right to buy back the former affiliate. Kumho Asiana said earlier that the legal measures will likely include a court injunction against the proposed sale of Kumho Tire to a consortium led by a Chinese firm.
The KDB-led creditors have said they will move forward with the sale of Kumho Tire to Chinese tiremaker Doublestar, unless the Kumho Asiana chairman formally expresses his takeover intentions.
Kumho Tire was placed under a creditor-led workout program in 2009 after its parent company was hit by a liquidity problem following its takeover of Daewoo Engineering and Construction Co.
At that time, Park was given a priority option to buy back the country's tiremaker should the creditors of Kumho Tire decide to sell the company.
The creditors signed a deal earlier this month to sell their combined 42.01 percent stake in the tiremaker to Doublestar for 955 billion won ($831 million). (Yonhap)