The state-run Korea Development Bank leading the creditors’ association of Kumho Tire has rejected a management plan from Kumho Asiana Group for saving the troubled tire company, asking for more details about its execution before the creditors’ meeting next week.

The move puts more pressure on Kumho Asiana Chairman Park Sam-koo to come up with new measures to keep Kumho Tire afloat. If the revised plan is also rejected, the creditors will begin steps to remove Kumho Asiana Chairman Park Sam-koo from the leadership of Kumho Tire and possibly place the company under court receivership.

The original 630 billion won ($558.3 million) plan submitted Tuesday included measures such as selling Kumho Tire’s Chinese plant, having employees give up their pay, issuing new shares to raise 200 billion won and selling Kumho Tire’s 130 billion won stake in Daewoo Engineering and Construction. 

Also included in the plan was a pledge from Chairman Park that he would give up his right of first refusal if the normalization plan for Kumho Tire was unsuccessful.

“A revised plan is currently being put together, but it is unclear exactly when it will be delivered to the creditors,” an official with Kumho Asiana Group said.

Kumho Tire was handed over to creditors in 2010 as part of a debt restructuring program.

Park currently has an opening to make another bid to buy back the tire company after a deal between the creditors and Chinese company Qingdao Doublestar officially fell through yesterday.

Park had tried once before to buy back the company himself using his right of first refusal, but ultimately lost out on the bid to Doublestar in March when the creditors did not allow him to form a consortium to raise the necessary funds.

Industry watchers have raised the possibility that Park has offered to issue new shares in order to increase his own stake and outvote creditors from attempting to sell Kumho Tire to another third party.

If Park is able to retain his management of Kumho Tire, he may have the opportunity to buy back Kumho Tire at a lower price than Doublestar’s original stock purchase agreement sum of 955 billion won. 

Doublestar’s original agreement had fallen through because the Chinese company had asked for a price reduction to reflect Kumho Tire’s falling profits. 

Kumho Tire saw a 50.7 billion won loss in operating profits in the first half of 2017.

By Won Ho-jung (hjwon@heraldcorp.com)