Creditors of Kumho Tire Co. are poised to begin the sale process for South Korea's second-largest tire maker next month with the aim of picking a prime bidder during the first half of 2017, sources said Tuesday.

Kumho Tire graduated from a debt workout program in late 2014, five years after it was placed under creditor oversight because its parent Kumho Asiana Group suffered a severe liquidity crunch from the purchase of Daewoo Engineering and Construction Co.

Nine creditors hold a combined 42.1 percent of Kumho Tire, with Woori Bank and the Korea Development Bank owning 14 percent and 13.5 percent, respectively.

According to the sources, creditors plan to make a public notice of sale around Sept. 20 and receive letters of intent from investors. Preliminary bids will be received in mid-November, with the main bidding slated for January 2017.

A preferred bidder is likely to be chosen during the first half of next year, given the fact that the stage-by-stage process could be delayed by a couple of months, they added.

"Kumho Tire is a sufficiently attractive buy in that the company is the world's 12th-largest tire maker with a global sales network," a creditor bank official said.

Market watchers said all eyes will be on whether Kumho Asiana Chairman Park Sam-koo will exercise his "right of first refusal," which gives its holder the option to enter a business transaction with the owner of the stake according to specific terms.

Park holds the right in the capacity of an individual. He can exercise the right should he accept the offer price from the creditors, which is estimated to reach around 1 trillion won ($890 million).

Park reportedly wants to take over Kumho Tire in a bid to rebuild his business empire. Some watchers said Park may abandon the right because it is difficult to finance the deal as an individual. Instead, he will likely form a consortium or set up a special purpose company for the acquisition, they added.

"It is true that Chairman Park wants to win back Kumho Tire, but a specific funding plan has yet to be drawn up," a Kumho Asiana official said.

Analysts predict Kumho Tire's poor performance may have a negative impact on the sale price. The company's operating profit tumbled 26.4 percent on-year to 40.7 billion won in the second quarter of the year, while posting a net loss of 7.4 billion won due to foreign exchange losses and other factors. (Yonhap)