Sunday , August 20 2017

China’s Doublestar to buy Kumho tire stake in $830mn deal

sqwedwedwed

 

Bloomberg

China’s Qingdao Doublestar Co. said it has signed an agreement with Kumho Tire creditors to buy a 42 percent stake in the South Korean tiremaker in a deal that could enable Doublestar to further expand in China.
The deal, worth 955 billion won, or about $830 million, could help turn Doublestar into China’s largest tiremaker if it can fend off a potential counter bid from Kumho Tires’ chairman, who has said he wants to put together a consortium of investors to buy back the stake.
Just hours before the Doublestar deal was announced, Kumho Asiana Group said in a statement that its chairman Park Sam-koo would give up the right of first refusal if his
request to buy the Kumho Tire stake is allowed. Park is in talks with several strategic investors including a Chinese company, said Yun Byung-chul, Kumho Asiana Group’s chief financial officer.
“We are not opposing Doublestar because it is a Chinese company,” Yun said in a briefing in Seoul, referring to claims by South Korea that China has been retaliating against Korean companies for the country’s decision to allow the US to deploy a missile defense system on the Korean peninsula. “Considering various aspects of business management that we’ve done for about six decades, we expect there is more synergy with our buyout rather than a takeover by a foreign company,” he added.
A spokesman at Korea Development Bank, one of the creditors leading the stake sale, said its stance against Park making a bid has not changed. Kumho Asiana Group put Kumho Tire and Kumho Industrial Co. under a debt restructuring plan in December 2009. Creditors including state-owned Korea Development Bank and Woori Bank reached an agreement to convert debt to equity in 2010 and hold a total of 42 percent of shares in Kumho Tire.
Doublestar’s bid comes at a time when Chinese auto parts makers are buying US parts makers at a record pace. The Korean tiremaker, whose North American sales account for about 22 percent of sales, opened its first US manufacturing plant in Macon, Georgia, in May 2016, with an annual capacity of 4 million tires. Under the deal, Doublestar would purchase 66.4 million shares for 955 billion won, or at about 14,390 won per share. That would be about 75 percent higher than Kumho Tire’s closing share price of 8,220 won on Friday. Kumho Tire rose nearly 7 percent in Seoul on Monday, biggest gain since September.

About Admin

Check Also

epa05020469 An employee sorts out parcels at a store of JD.com online shopping website in an university in Beijing city, China, 11 November 2015. Chinese internet giant Alibaba made 5 billion dollars in the first 90 minutes of the country's 'Singles Day' online shopping binge on 11 November, defying fears of an economic slowdown in the world's second-largest economy. Alibaba rival and China's largest online direct sales company, JD.com, said on 11 November that its website had clocked up 10 million orders by 10 am (0200 GMT), which is up 180 per cent from the site's total number of orders on Singles Day last year.  EPA/WU HONG

JD.com’s loss widens on spending boost to drive sales

Bloomberg JD.com Inc. posted a wider quarterly loss as China’s second-largest online mall boosted marketing ...

Leave a Reply

Your email address will not be published. Required fields are marked *