Kumho Tire’s Former CEO Returns to Revive the Company
Struggling South Korean tiremaker Kumho Tire Co. has named former CEO Kim Jong-ho as its new chairman and CEO in hopes of accelerating the company’s financial turnaround.
Struggling South Korean tiremaker Kumho Tire Co. has named former CEO Kim Jong-ho as its new chairman and CEO in hopes of accelerating the company’s financial turnaround.
Kumho has been operating under a creditor-led workout since 2009 after overexpanding. Earlier this year the creditors, led by Korea Development Bank, agreed to sell their 42% stake in the company to Chinese tiremaker Qingdao Doublestar Co. for 995 billion won ($920 million).
But the deal stumbled when Park Sam-koo, chairman of Kumho’s parent, Kumho Asiana, demanded his right to exercise an option to buy back the company. Doublestar promptly lowered its bid price, and Kumho Tire’s shareholders rejected the revised offer.
Kim was the tiremaker’s CEO between 2009 and 2012. The Nikkei, citing an analyst with Hanwha Investment & Securities, says Kumho is likely to report a net loss next year of 43 billion won ($40 million) because of high interest payments on the company’s debt.
But the analyst predicts the company will post a 53 billion-won operating profit for the period, thanks to strong sales in China, Europe and North America.