QINGDAO, China — China's Sailun Group has agreed to sell its British distribution subsidiary Kings Road Tyres Group (KRT Group) to a new company set up and controlled by a London-based "corporate finance institution investor."
Sailun said in a recent filing on the Shanghai Stock Exchange that the subsidiary's operations "haven't reached the expectation" and "cannot provide palpable support for our company's European market strategies."
KRT Group suffered a loss of nearly $6 million for period ended June 30 on sales of about $26 million, according to the Sailun filing.
The new company, Burton on Trent, England-based KRT Holdings, is paying $590,000 for KRT Group, according to the filing. The new company is backed by the U.K.'s Resolve Invest Ltd.
Sailun acquired KRT Group in 2014 when it was deeper in the red at a symbolic price of one British pound, according to its filing at the time.
KRT Group serves customers throughout the United Kingdom and Ireland from a network of four warehouses in the U.K. The company was founded in 1972 by Philip Rushton.
Qingdao-based Sailun is represented in the U.S. by TBC Corp. and in Canada by Dynamic Tire Corp. of Woodbridge, Ontario. It also has its own subsididiary, Maxam Tire North America in Danvers, Mass., to handle its Maxam OTR tire brand.