Refile: Creditors in Kumho Tire appoint Credit Suisse to sell stake -sources

Kumho Tire

12/02/2016 14:10

(Refiles FEB 9 story to add dropped word "replacement", 
paragraph 2) 
    Feb 9 (Reuters) - Creditors in South Korea's Kumho Tire Co 
 073240.KS  have asked Credit Suisse  CSGN.VX  to work on a sale 
of their stake, the latest unit to come on the block from the 
former Kumho Asiana Group empire, three sources familiar with 
the situation said.  
    Kumho Tire manufactures replacement tyres for luxury sports 
car brands including Ferrari  RACE.MI , McLaren Automotive and 
VW's  VOWG_p.DE  Bugatti, as well as for trucks and SUVs. 
    The company currently has a market capitalization of 1.07 
trillion Korean won ($893 million). 
    Kumho Tire's creditors hold around 42 percent of the 
business and appointed Credit Suisse last week with a view to 
starting a sale process before the summer, the sources said on 
Tuesday.  
    Kumho Tire had no immediate comment. Credit Suisse declined 
to comment.     
    The chairman of Kumho Asiana Group, Park Sam-koo, has a 
right of first refusal on any deal once bids are in, the sources 
said.  
    Park Sam-koo is also a member of the founding family of 
Kumho Asiana Group, which developed from its origins as a taxi 
firm into one of South Korea's largest conglomerates, 
encompassing aviation, chemicals and industrials.  
    But an over-ambitious acquisition strategy before the global 
financial crisis left the conglomerate saddled with debt, 
leading to Kumho Tire and Kumho Industrial being put under a 
creditor-led debt restructuring in late 2009.   
    Creditors in Kumho Industrial Co, which controls Asiana 
Airlines Inc  020560.KS , already agreed in September last year 
to sell their stake to Park Sam-koo for 723 billion won ($604 
million).  urn:newsml:reuters.com:*:nL4N0XP4SQ  urn:newsml:reuters.com:*:nL4N11N1GY 
    Park Sam-koo's right of refusal on Kumho Tire, plus the 
limited size of the stake up for grabs and the matter of dealing 
with the company's labour union, could limit interest from 
European or U.S. buyers, the sources said.  
    Kumho Tire company ranks as the ninth-largest tyremaker 
worldwide, according to its U.S. website. Last week the company 
said it had appointed Han-Seob Lee, its 62-year-old former head 
of sales, as its new chief executive to replace Chang-Kyu Kim.  
    The shares currently trade on a multiple of 6.8 times actual 
earnings before interest, tax, depreciation and amortisation, 
according to Thomson Reuters data. The sale was unlikely to 
fetch a higher multiple than that, two sources said. 
    However a further source said the company's links with China 
could value it at up to nine times EBITDA if it demonstrated 
good growth prospects in the coming months.  
($1 = 1,197.9800 won) 
 
 (Reporting By Freya Berry in London, Arno Schuetze in Frankfurt 
and Denny Thomas in Hong Kong; Additional reporting by Pamela 
Barbaglia; Editing by Greg Mahlich) 
 ((freya.berry@thomsonreuters.com;)(+44207 5420214; Reuters 
Messaging: freya.berry.thomsonreuters.com@reuters.net)) 
 
Keywords: KUMHO TIRE M&A/CREDIT SUISSE GP