SEOUL– Creditors of Kumho Tire Co. and China’s Qingdao Doublestar Co. failed to narrow differences on a demand by the Chinese firm to cut its bid price for a controlling stake in the South Korean tiremaker, an industry source said Tuesday.
The failure is likely to lead to a termination of the contract that aimed to sell Kumho Tire to Doublestar, the source said on the condition of anonymity.
The creditors, led by the state-run Korea Development Bank (KDB), were set to hold a meeting later in the day to decide on whether to accept the demand by Doublestar, the source said.
Besides the price, the creditors and Doublestar have remained far apart on other issues, including job security for Kumho Tire employees, the source said.
If the creditors decide to reject the demand by Doublestar at the upcoming meeting, the deal will be canceled, the source said.
Doublestar signed the 955 billion-won (US$844 million) contract with the creditors in March to buy a 42.01 percent stake in Kumho Tire.
After months of a bitter dispute over the use of Kumho Tire’s brand, the Chinese company submitted documents in early August for approval from the South Korean government in what appeared to be a final step to complete the acquisition.
However, Doublestar has demanded the creditors cut the price by 16 percent to 800 billion won, adding a new twist to the Chinese firm’s bid to acquire Kumho Tire.
Source: Yonhap News Agency