Creditors have reportedly named PricewaterhouseCoopers Korea and Deloitte Anjin LLC as the firms carrying out due diligence on Kumho Tire and Kumho Industrial. The accounting firms may take about two months two deliver reports, however creditors have decided to conclude the process earlier than previously planned to speed up the normalisation of the two Kumho Asiana business units.
The Korea Times has reported (on 19 January, 2010) that creditor-led restructuring of the cash-strapped Kumho Asiana Group has started off badly. Reports say that disputes are growing between the group, creditors and other stakeholders over how to resolve major issues surrounding debts from Kumho’s takeover of Daewoo Engineering & Construction in 2006. Separately, the debt workout programs of Kumho Industrial and Kumho Tire have hit rocky ground as founding family members and creditors are in disagreement over how to restructure the group. Creditors insist Kumho Petrochemical, the group's de facto holding firm, and Kumho Asiana Airlines should be subject to the debt repayment plan.
According to a statement released by Kumho Asiana, the group dismissed seven of its 18 CEO-level executives on January 12. The company had previously said it would cut the number of executives in its ranks by 20 per cent and raise more than Krw 1.3 trillion (£695 million) through cost cutting measures and asset sales.
Even as the debt-laden Kumho Asiana Group continues with its overall corporate restructuring plan, more details are starting to emerge about the fate of its Kumho Tire Co. unit. Both Kumho Tire and sister unit Kumho Industrial have entered a debt “work-out” program with creditors, and the “majority” of those creditors have agreed to freeze debt repayments for three months to allow the companies “time to carry out a planned restructuring programme.”
The Business Financial Newswire reports that Kumho Tire’s creditors have frozen the company’s debt repayment between December 30 and April 5 and have given their approval to a plan to place the company under a debt-workout programme. Under the workout programme, the due diligence process on the company before a final restructuring programme is agreed upon is expected to take about six-to-eight weeks.
The laser etching process that Kumho showed off at last September’s Frankfurt Motor Show has landed the South Korean manufacturer an iF Product Design Award. The accolade from Germany’s International Forum Design, first introduced in 1954, is awarded upon the merits of a product’s design, technology, degree of innovation and brand value potential. A total of 2,486 entries from 1,081 companies in 39 countries were submitted for the latest round of awards. The awards are divided into 16 categories, and Kumho’s victory in the 2010 awards took place in the ‘Advanced Studies’ category.
As many as a fifth of Kumho Asiana Group executives may face the axe as part of a restructuring arrangement, the Wall Street Journal reported on January 5, The paper added that remaining management could also see their salaries shrink by 20 per cent under the terms of such a deal. The company has already indicated its intention to raise more than KRW 1.3 trillion (£695 million) through the restructuring of its assets, including the Kumho Tire and Kumho Industrial business units. Following the publication of this news the value of Kumho Tire shares plunged 15 per cent, the maximum decrease permitted in a single day.
The Kumho Asiana group has reportedly agreed to restructure Kumho Tire along with its Kumho Industrial subsidiary following the failed sale of Daewoo Engineering & Construction to two private equity firms. Had Jabez Partners and TR America purchased the company for US$2.4billion, Kumho would have found it easier to meet a $3.4 billion payment in January, but raising funds for a purchase at between KRW 20,000 and 24,000 (£10.40 and £12.50) per share proved more difficult than anticipated.
Kumho Tire parent company the Kumho Asiana Group has donated three billion won (£1.58 million) to help needy South Koreans. On December 1 the CEO of Kumho Asiana’s Strategic Management Headquarters, Nam-Su Oh, visited the ‘Community Chest of Korea’ charity group in Seoul and made the donation. Following the donation, a Kumho Asiana spokesperson commented: “While we have been focused on corporate restructuring, we cannot neglect our contribution to needy neighbours. We decided to become the first [corporate] donor, considering our needy neighbours who have been suffered from a hard winter in this global financial crisis.”
Kumho Tire has given word of arrangements to supply truck tyres to Daimler AG in its home market. As of late November the Mercedes Benz Actros will be sold in South Korea with Kumho tyres as OE. Due to a confidentiality clause, however, the company has not revealed how many tyres will be delivered to Daimler as part of the arrangement.
Some say their employers want blood from them, and those at Kumho in South Korea may have grounds to make such a claim. But don’t worry – it’s all for a good cause. Due to the recent H1N1 influenza scare the country has experienced a dramatic drop in blood donations, and this has led to a noticeable shortage of the precious fluid needed for transfusions. According to Kumho, upon hearing this news, all Kumho Asiana Group executives and employees stepped forward to donate blood.
Industry veteran John Hagan has been named senior director of sales operations for Toyo Tire USA Corp.
Replacing Armand Allaire, who left Toyo for a similar post with Kumho Tire USA Inc., Hagan will be responsible for all of Toyo’s sales operations and will report directly to president and CEO Yasushi Takagi.
Hagan’s past experience serving as vice president of OE sales for Pirelli Tire North America, and as vice president of sales and marketing for companies in the chemical and import/export industries. (Tire Review)
Dave Taylor, vice president of technical services at Toyo Tire USA, has announced his retirement after 23 years with the company, reports Tire Review. Toyo said Taylor played a key role in the pioneering of niche sizes and products such as the Toyo Open Country M/T and Proxes S/T. Earlier this week, sales vice president Armand Allaire left Toyo to become Kumho Tire USA’s new national vice president of sales.
Industry veteran Armand Allaire has joined Kumho Tire USA as the national vice president of sales, reports Tire Review. Most recently Allaire was vice president of sales for Toyo Tire USA, and previously was a sales and marketing director for the then Bridgestone USA Inc. “Armand brings a unique blend of salesmanship and management experience to Kumho,” said JB Kim, Kumho's president and CEO, “we look forward to his guidance and vision as we build Kumho Tire for the future.”
According to Kumho, its prominent position in a ‘major hall’ at September’s Frankfurt Motor Show demonstrates the seriousness with which the Korean tyre maker takes its increasing role in the European motor industry.
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