Kumho Tire Raises $363 Million in IPO

Kumho Tire, South Korea’s second-largest tyre maker, raised 373 billion won (around £193 million) in its recent IPO, according to the Reuters news agency. The total equates to the country’s largest issue in more than six months, the report added.

Despite the fact that figure was well below the company’s £215 million target, the company was satisfied with the result, Tire Review has reported, citing Seoul news sources. At the same time, stock analysts were reported to be “bullish” on Kumho shares, primarily because of high export sales, recent price increases and strong demand for ultra-high performance tyres.

Kumho, which controls 42 per cent of the home tyre market, is selling 25.49 million shares at 14,650 won each, near the midpoint of an expected range between 13,250 won to 16,000 won, a source familiar with the deal said.

The manufacturer has stated that by the end of this year it will double annual production capacity to 12 million units at its plant in Nanjing, China. It also plans to build a new plant in Tianjin, China, that will go on-stream in 2007.

The world’s 11th-largest tyre maker, will use the proceeds to expand its operations in China and slash debt. The dual listing in London and Seoul attracted good demand while Cooper Tire & Rubber Co. of the United States pledged to buy nearly 30 per cent of the shares offered, the report concluded.