After a prolonged and messy fight to buy back Kumho Tire, Kumho Asiana Chairman Park Sam-koo has given up his right of first refusal over the tire company and has decided to step down from executive management. 

“Chairman Park has decided to resign from his management position and give up his right of first refusal to prevent any interference with the business normalization of Kumho Tire,” said Kumho Tire’s lead creditor Korea Development Bank on Tuesday.

The announcement brings Kumho Tire back to the position it was in last year before creditors tried to sell a 42 percent controlling stake in the company. The stake was eyed by China’s Qingdao Doublestar, but the purchase agreement reached in March was nullified due to disputes over the sale price following Kumho Tire’s poor performance in the first half of the year.

The decision also concludes, for now, Park’s strenuous efforts to bring the tire company back into Kumho Asiana Group after handing over the reins to creditors as part of a debt restructuring deal in 2010.

In an attempt to keep Kumho Tire under the management of Park after the sale agreement was dissolved, the company submitted a 630 billion won ($554 million) self-rescue plan that included selling its Chinese plant and raising emergency funds to pay off its debts earlier this month.

The plan was rejected, leading to Park’s resignation.

“When considering effectiveness and practicality, creditors decided that Kumho Tire’s self-rescue plan was insufficient to resolve the company’s current management crisis,” KDB said.

Just three years after graduating from a debt workout program that separated the tire company from its parent group, Kumho Tire faces another restructuring under the supervision of the creditors’ union.

“It’s hard to say what would have been the best outcome, but at this point all we can do is follow the creditors’ decision,” said an official with Kumho Tire. “The Chinese deal is gone, so there’s no alternative.”

For now, Chairman Park has put the survival of Kumho Tire first by offering “full support” such as unlimited use of the Kumho trademark in reviving the tire company’s performance.

Creditors including KDB will ultimately have to seek another buyer in order to collect on their loans. During negotiations over the Doublestar deal, creditors faced pushback from Kumho Tire’s labor union as well as political figures such as the industry minister, who signaled against handing over the company to a foreign buyer.

However, there is still no indication on the fate of Kumho Tire after the restructuring takes place. 

(hjwon@heraldcorp.com)