SEOUL — Korea Development Bank, the South Korean state-owned policy bank, reportedly is reviving talks with Chinese tire maker Qingdao Doublestar Tire Co. Ltd. over a possible sale of its stake in Kumho Tire Co. Ltd.
KDB, which is part of a consortium that owns a 42-percent stake in Kumho Tire, is proposing issuing new shares in Kumho that Doublestar would acquire, making it the largest shareholder at approximately 45 percent, according to multiple reports March 2 in Korean media.
Doublestar had agreed in late 2016 to buy KDB's stake in Kumho for a reported $850 million before disagreements over trademark rights and Kumho's profitability prompted the Chinese company to revise its offer downward.
The parties eventually agreed to cancel the deal.
Under the announced proposal, Kumho would issue new shares worth roughly $600 million in a private placement, at 5,000 Korean won ($4.45) per share.
Buying the shares would give Doublestar 45 percent of the firm's revamped share structure, according the KDB proposal.
The KDB creditors group's holding would fall to 23 percent from 42 percent, the news reports said.
Word of KDB's renewed offer to Doublestar came after Kumho's management failed to reach an agreement with labor union representatives on a rescue plan, the reports said.
Kumho reported an operating loss of $39.6 million for the nine months ended Sept. 30, 2017, on sales of $1.66 billion. Full-year financials have not been released.
Doublestar was the No. 23 ranked company on Tire Business' 2017 Top 75 tire makers' ranking, with 2016 sales of $1.06 billion.