Kumho Tire Co., South Korea’s second-largest tire maker, has graduated from a debt workout program it was placed under five years ago due to liquidity problems, its creditors said Tuesday.
Kumho Tire had been under oversight since December 2009 after its parent conglomerate Kumho Asiana Group suffered a severe liquidity crunch from the purchase of Daewoo Engineering and Construction Co.
Nine creditors hold 42 percent of Kumho Tire, with Woori Bank and Korea Development Bank owning 14 percent and 13.5 percent.
“As of Tuesday afternoon, more than 75 percent of creditors in terms of debt amount have expressed support, satisfying the threshold for the graduation from the workout,” a source from one of the creditors said.
The decision had been long expected as the company’s financial status has improved significantly.
Kumho Tire’s debt ratio was as high as 858 percent in 2010 but fell to 290 percent during the first half of this year. Its credit rating was also upgraded from BBB- to BBB.
Kumho Asiana Group Chairman Park Sam-goo and his family currently hold a 7.9 percent stake in the company. They have the right to buy back the stakes owned by the creditors.
Shares of Kumho Tire closed at 10,400 won on Tuesday, up 1.46 percent from the previous day. (Yonhap)
