KDB wants a no-strike clause in Kumho/Doublestar deal

Korea Development Bank (KDB), the main creditor of Kumho Tire, has plans to put a no-strike clause in Doublestar’s current bid to buy Kumho.

The no-strike clause is one of the preconditions KDB has laid out for sale of Kumho Tire to Qingdao Doublestar, according to a document provided to Korean media by Kumho Tire’s union last week. Kumho is said to be heading for court receivership unless it accepts Doublestar’s investment proposals (or another viable plan) by the end of this month.

On 20 March the KDB said the no-strike clause does not ban union strikes but that it means an investor has the right to cancel a contract in case there is a strike against attracting foreign capital.

Doublestar said it will not invest in Kumho Tire unless the union accepts the Chinese company’s proposed investment, according to the KDB. Doublestar has offered to invest 646.3 billion won ($603.4 million) in new Kumho Tire shares, which would make it the biggest shareholder, with a stake of 45 per cent.