Kumho chief says he wants to resolve Kumho Tire brand issue in ‘reasonable’ manner
SEOUL-- The head of Kumho Asiana Group said he is committed to resolving the differences over the Kumho Tire brand issue in a "reasonable" manner, a corporate source said Sunday.
The insider who declined to be identified said Park Sam-koo made the remark at a conglomerate event held on Saturday in Seoul.
The impasse surrounding the use of the brand has been one factor holding up the sale of the debt-ridden Kumho Tire to China's Qingdao Doublestar. The tiremaker is currently part of the South Korean conglomerate, although nine creditors hold a combined 42.01 percent stake in the company.
The Chinese company had inked a 955 billion won (US$853 million) deal in March to acquire stakes held by local creditors including state-run Korea Development Bank (KDB). The deal could help Doublestar become China's leading tiremaker and expand its overseas presence.
Since the signing, Kumho Tire's creditors and Qingdao Doublestar have discussed the use of the brand name, but headway has been slow due to outstanding differences.
Park and Kumho Asiana have insisted that Doublestar must exclusively use the brand name for 12 and a half years, and pay a user fee equal to 0.5 percent of sales.
The Chinese company countered that it will use the brand name for five years with annual rates set at 0.2 percent.
With the two sides unable to reach a compromise, creditors had offered to pay Kumho the 0.3 percent difference and the exclusive use of the brand in line with the local conglomerate's demand.
Kumho has since accepted part of the compromise although maintaining the stance that Doublestar must pay the brand's user charge in full.
Industry watchers said the stance and Park's latest remark about a "reasonable" solution is a sign that it is opposed in part to what creditors are calling for.
The creditors, meanwhile, will hold a meeting of shareholders this week to deliberate on the compromise solution and Kumho's reaction so as to finalize the long-drawn deal as soon as possible.
Source: Yonhap News Agency