Adding more uncertainty to the prospects of Kumho Tire going under Chinese rival Doublestar Tyre, Kumho Asiana Group deferred its response to a de facto ultimatum from creditors on trademark terms, while the management of the country’s second largest tire maker threatened to resign in mass should their company fall under Chinese name.
Kumho Industrial Co. that owns Kumho trademark rights on Thursday notified Kumho Tire’s main creditor Korea Development Bank that it was pushing back the board meeting to decide on its final stance on trademark terms to July 18 from original date of July 13.
The trademark dispute would determine the fate of Kumho Tire as creditors warned that they would no longer roll over its maturing debt and condone the tire maker’s fall into court receivership if Kumho Tire does not comply with Doubestar and creditors’ terms on trademark fees and use.
The sale of the company to Doublestar Tyre that offered $851 million in March have been delayed by Kumho Asiana Group Chairman Park Sam-koo whose wish to buy back the tire company his father had founded was dashed. Since then the group has been blocking the sale by demanding stricter trademark terms.
Kumho Industrial wants the Chinese company to pay royalty fees in 0.5 percent of the annual sales and oblige mandatory use of Kumho brand for 20 years. In contrast, Doublestar offered to pay royalty fees in 0.2 percent of the annual sales, mandatory use of Kumho brand for 5 years, and option of selective use of the brand in the following 15 years.
Creditors, trying to mediate a compromise between the two, suggested royalty fees in 0.5 percent of the annual sales and mandatory use of the brand for 12 years and 6 months. The deal could fall through if the sale deal is not sealed by the end of September.
The management joined the general staff who have been protesting to the sale. The entire executive members threatened to leave the company if it falls under the Chinese maker.
By Kim Jung-hwan and Park Chang-young
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]