QINGDAO, China — Chinese investors, led by Qingdao Doublestar Tire Co. Ltd., have reached an agreement with Kumho Tire Co. Inc. shareholder Korea Development Bank (KDB) to acquire a 45-percent stake in the tire maker, according to Doublestar representatives.
Speaking to Tire Business' sister publication European Rubber Journal, Doublestar said the investors' group would acquire the stake through a $630 million private placement of shares to Doublestar and three Chinese state-owned companies, Qingdao Conson Development (Group) Co. Ltd., Qingdao City Construction Investment (Group) and Qingdao Port International Co. Ltd.
The transaction, pending relevant approval, is expected to close by the end of September, according to Doublestar.
KDB, the South Korean state-owned policy bank, is part of a consortium that currently owns a 42-percent stake in Kumho; the consortium's ownership will drop to 23 percent after the placement.
In late 2016 Doublestar agreed buy KDB's stake in Kumho before disagreements over trademark rights and Kumho's profitability eventually lead to cancelation of the deal.
The new price is 30-percent lower than the old price, Doublestar 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.
Kumho last year completed a $500 million project to relocate and upgrade separate passenger and truck tire plants to a single site in Nanjing, Jiangsu.
Doublestar was No. 23 on Tire Business' 2017 Top 75 tire makers' ranking, with 2016 sales of $1.06 billion. Kumho was 14th with sales of $2.4 billion.