Creditors of Kumho Tire Co. on Thursday appointed a former chief executive of the financially troubled tiremaker in a move to help put it back on track.
Creditors led by the state-run Korea Development Bank (KDB) named Kim Jong-ho, 70, as CEO and president of the country’s No. 2 tiremaker as he was formerly involved in the company’s debt-rescheduling programs during his term as chief executive at Kumho from 2009 to 2012.
They also appointed Han Yong-seong, 63, formerly from Woori Bank, who had been involved in the restructuring effort of the now-defunct Daewoo Group as vice president, the statement released by creditors said.
The KDB plans to seek approval for the appointments at the tiremaker’s extraordinary shareholders’ meeting set for Dec. 1.
The appointments come after creditors named Senior Executive Vice President Sohn Bong-young as “temporary representative” of Kumho Tire last month when the tiremaker’s Chairman and co-CEO Park Sam-koo and President stepped down.
In September, creditors’ efforts to sell a 42.01-percent stake in Kumho Tire to China’s Qingdao Doublestar collapsed due to differences over the acquisition price.
In March, Qingdao Doublestar signed a 955 billion won ($832.2 million) contract with creditors to buy the tiremaker, but the deal fell through when the Chinese company demanded a cut in the purchase price to 800 billion won, citing deteriorating earnings.
In the January-June period, Kumho Tire’s net losses deepened to 108 billion won from 22 billion won a year earlier. At the end of June, it owed 2.74 trillion won to financial institutions.