Doublestar has announced that its parent has agreed to pay 646.3 billion won ($597.4 million) for a 45 percent stake in South Korea’s troubled Kumho Tire Co Inc.
A unit of its controlling shareholder, Doublestar Group, would buy 129.3 million ordinary shares in Kumho Tire, capping a lengthy takeover process, the Chinese firm said in a statement to the Shenzhen exchange.
In September, Korea Development Bank (KDB) and other Kumho Tire creditors terminated an $872 million deal to sell a stake in Kumho to Doublestar after the Chinese firm demanded a cheaper price, citing the tire maker’s weakening profits.
An over-ambitious acquisition strategy run by Kumho Tire’s former parent company before the global financial crisis left the conglomerate saddled with debt, leading to Kumho Tire being put under a creditor-led debt restructuring in late 2009.
In January last year, Kumho Tire said that Doublestar had been chosen as the preferred bidder to buy a controlling stake in the firm. The South Korean firm’s creditor originally put the stake up for sale in 2016.