Kumho Industrial creditors have requested more than 1 trillion won for a deal involving Kumho-Asiana Group, but industry sources familiar to the deal and even some inside creditors agree that the price is too high.
On June 26, the creditors demanded 1.021 trillion won, the equivalent of 59,000 won per share, to hand over management rights of the company to Kumho-Asiana as the group has the right of first refusal for the acquisition of the construction company, the de facto holding company of the group. The business group wants to retake Kumho Industrial, which was torn apart along with other subsidiaries in a liquidity crisis.
Kumho-Asiana Group Chairman Park Sam-koo’s side disagrees with the creditors’ asking price, saying it runs counter to the rationale of market forces.
The creditors’ price of 59,000 won per share is higher than the 31,000 won per share (a combined 537 billion won) evaluation the company was valued at in a due diligence conducted by two accounting firms, including Samil PricewaterhouseCoopers.
Kumho Industrial shares closed at 18,100 won on June 29.
The Kumho-Asiana Group side unofficially offered 589 billion won, or 34,000 won per share, double its current market capitalization plus a 10 percent premium over the current share However it withdrew the offer after creditors requested more than 1 trillion won. The creditors reportedly proposed the price in return for the acquisition of their controlling stake — a 57.48 percent share in the de facto holding company of Kumho Asiana Group. Kumho Industrial has a 30.1 percent stake in Asiana, Korea’s second-largest airline. Asiana in turn controls other affiliates and holds a 46 percent stake in low-cost carrier Air Busan. It also owns a bus terminal operator.
The group revised its official offering price to 650.3 billion won, up 50 billion won from its initial official offering price.
Kumho-Asiana Group Chairman Park said, “The creditor side’s offering price go against the logic of market forces, and it is all it tries to take back.”
He expressed hope that a reasonable proposal based on market forces will be made for compromise.
Chairman Park accused Mirae Asset of playing an essential part in suggesting the outrageous price. Mirae Asset is one of the six institutional creditors sitting on the standing committee. The creditors reportedly considered a price range from 650 billion won to 850 billion won. Mirae Asset’s private equity fund side posted a strong opposition to the initial offer and upped the asking price to more than 1 trillion won.
In this situation, the creditor and Kumho-Asiana sides held talks, but reportedly failed to narrow their differences. A participant at the meeting said it will take more time to iron out differences, since the price difference between the two sides is substantial.
Both sides are expected to continue to hold negotiations on the final price. The creditor side will likely submit the negotiated offering price for approval from the general meeting of creditors before being notified of the Kumho-Asiana Group’s side. Chairman Park’s side will have one month to determine whether he will accept or refuse the acquisition of the construction company after receiving the offer.
Negotiations are forecast to be rough sailing, an industry source said. He added that a great majority of creditors may consider 1 trillion out of the question, so the price could be lowered greatly for the sake of striking a deal.
_금호 박삼구 회장.jpg)
_금호 건물.jpg)
