It now looks like Qingdao Doublestar Tire’s acquisition of a 42.01 per cent share in Kumho Tire will go ahead.
In March, China’s Qingdao Doublestar Co. signed a US$ 852 million) deal to acquire this stake in Kumho Tire, but the process of acquisition was delayed over how much Kumho Tire should pay for the use of the Kumho brand name. Last Friday, the creditors of Kumho Tire accepted the offer made by Kumho Asiana.
Under the agreement approved by more than three quarters of the creditors, Doublestar will pay 0.2 per cent of its sales to Kumho Asiana for 20 years as a royalty for using the Kumho brand name.
According to Yonhap News, the creditors will additionally give Kumho Tire an amount equivalent to 0.3 per cent of its annual sales, and Kumho Tire will pay this money to Kumho Asiana. Creditor bank officials estimate that this 0.3 per cent will amount to around KRW 9 billion (£6.1 million) a year.