Kumho-Asiana Group Chairman Park Sam-koo said he will devote himself to not only rebuilding Kumho-Asiana Group, but also developing the nation. He also revealed his willingness to reconcile a dispute with his younger brother, Kumho Petrochemical Group Park Chan-koo.
Kumho-Asiana Group released a statement to the effect after Chairman Park signed a deal on Sept. 24 to take over management rights of Kumho Industrial, the de facto holding company of the group, (a 50 percent stake plus one share) in return for paying 722.8 billion won with its creditors. The agreement has allowed the business group to retake its position as the largest shareholder of Kumho Industrial, six years after it went into a workout program after it was torn apart due to a liquidity crisis.
Chairman Park, in the statement, said “I will consider the acquisition of Kumho Industrial as my last chance, so I’ll go back to the basics and humble myself to devote the rest of my life to helping Kumho-Asiana Group contribute to national development. I’ll do my best to promote harmony among family members,” he said.
Park’s remarks on the reconciliation of a family feud may be construed as his willingness to reconcile family disputes with Kumho Petrochemical Group Chairman Park.
Kumho-Asiana Group Chairman Park is required to submit a plan to raise the acquisition money to creditors within a month and pay the money within three months from the contracting date. He will have to pay 36.1 billion won, or 5 percent of the contracting money, in penalty charges if he fails to comply with the deal. The group’s acquisition of Kumho Industrial will close if it pays out 722.8 billion won by Dec. 30.
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, but industry sources familiar to the deal and even some inside creditors agree that the price was too high.
The group had the right of first refusal for the acquisition of the construction company. Chairman Park’s side disagreed with the creditors’ asking price, saying it ran counter to the rationale of market forces. The creditors’ price of 59,000 won per share was 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.
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 the low-cost carrier Air Busan. It also owns a bus terminal operator.
At that time, 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 would 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 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 failed to narrow their differences. A participant at the meeting said it would take more time to iron out differences, since the price difference between the two sides is substantial.
Both sides continued to hold negotiations on the final price. The creditor side submitted the negotiated offering price for approval from the general meeting of creditors before being notified of the Kumho-Asiana Group’s side.
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