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Kumho chairman ponders creditors' ultimatum.

Kumho Asiana Group Chairman Park Sam-koo is pondering over a request for him to clarify his position, this week, on whether to allow Doublestar Tyre to use the "Kumho" brand name. It remains to be seen how he will react to the ultimatum, observers said Wednesday.

Earlier this week, Kumho Tire creditors including the Korea Development Bank sent an official document to Kumho Industrial, to ask if it will allow the Chinese tire firm to use the Kumho brand name for 20 years.

Kumho Industrial is a holding company of Kumho Asiana Group. As Park is a representative director of the company, analysts said that the official document is the creditors' ultimatum to the chairman.

Although Park recently said that he can consider allowing Doublestar to use the trademark for five years, he has yet to clarify the company's official position. He also wants to raise the license fee, claiming that Kumho Tire will be separated from the group after it is sold to Doublestar.

Creditors are using Kumho Tire's 1.3 trillion won ($1.1 billion) debt as a weapon against Park.

The maturity date is coming this month. If creditors do not postpone the date, Kumho Tire will be in trouble. They will make the final decision next Thursday.

If the chairman declines to respond to the official document or ignores the demand, creditors are expected not to delay the maturity date. They have pressured Park, saying Kumho Tire may go into receivership, something Park is unlikely to countenance.

Kumho Asiana Group has yet to make any official response. The group said it will mull over the matter until the deadline.

An official said that Park will not dramatically change his stance because the creditors did not make any concessions. But the creditors claim that the group has no choice but to sell the tire unit for its recovery.

Kumho Tire's operating profit rate has continued to decline since it finished a workout in 2014. It suffered a loss in the first quarter this year, while its local rivals have maintained 10 percent operating profits rate.

The company's union wants to deprive Park of his control of the company and his right of first refusal as well.

The creditors have already got permission to use the brand name from Kumho Petrochemical, a joint owner of the trademark.

The chemical company, which is led by Chairman Park Chan-koo, a brother of Chairman Park Sam-koo, has used the Kumho brand, since it separated from the group in 2011. Although Kumho Industrial filed a copyright suit in 2013, Kumho Petrochemical won the trial and an appeal is under way.

The latter said there is no reason to oppose to the use of the trademark, if Doublestar pays the current license fee.

In addition, the creditors are expected to pressure the group's chairman indirectly by using their bonds and stakes in Asiana Airlines.

Creditors have secured 500 billion won in bonds of the group's key subsidiary. Also, KDB is the third-largest stockholder of the company with a 5.94 percent share.

But still, negative public sentiment can be a burden to the creditors. Surveys have shown that most Koreans are not in favor of selling a local company to a Chinese firm.

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Publication:The Korea Times News (Seoul, Korea)
Date:Jun 7, 2017
Words:613
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