Reports: Kumho-Doublestar deal imploding

SEOUL, South Korea — The pending sale of a 42-percent share in South Korea's Kumho Tire Co. Inc. to China's Qingdao Doublestar Tire Co. Ltd. is in danger of collapsing following a price-cut demand by the Chinese side was rejected, according to Korean news reports.

Following extended negotiations over trademark rights during the summer months, Doublestar reportedly asked for the price it earlier had agreed to pay to be reduced 16 percent from the original $830 million bid in March.

Business Korea reported on Sept. 5 that Kumho Tire creditors, led by Korea Development Bank (KDB), had decided to reject the demand during a shareholders' meeting.

"We negotiated with Doublestar side about a price cut a number of times, but failed to iron out differences and brought the termination of the SPA as an agenda for a shareholder meeting," said an official of the creditors.

"The deal has almost collapsed," Nikkie Asia Review quoted a KDB spokesman as saying.

According to the spokesman, shareholders will send a letter to Doublestar, asking it to agree to cancel the deal.

Whether or not Park Sam-Koo, chairman and former majority owner of Kumho Asiana Group, will be given rights to rebid for the shares, remains uncertain as reports suggest Mr. Park's delays were the cause of the collapse.

Seoul-based The Insider said quoted Mr. Park as telling reporters that the Kumho Asiana Group would consider asset sales in China to help "turn around" Kumho Tire.