Kumho-Asiana Group will focus on its new businesses next year with after finalizing its move to take back Kumho Industrial before the year to make room for new businesses, the group said recently.
The group’s major affiliates such as Asiana Airlines, Kumho Tire and Kumho Industrial are already seeking new growth engines to ramp up competitiveness. They have been looking into building plants overseas, setting up low cost carriers and rationalizing flight routes and preparing to secure large projects at home and overseas.
Kumho Tire plans to take advantage of its technology tie-up signed with Yokohama Rubber of Japan and complete the construction of a plant in the State of Georgia in the U.S. in a bid to eye the auto tire market in North America, the largest in the world. The company’s Macon plant will produce 4 million auto tires annually with the company investing $413 million in the new plant. It is targeted to be completed early next year.
Kumho Tire began its talks with the Japanese tire company on an OEM system, and any deal with the 8th largest tire company in the world would be of a great help to the Korean tire company’s plant in China.
Asiana Airlines plans to set up Air Seoul as an affiliate to act as a new growth engine for the air carrier. The low cost air carrier (LCC) got a new CEO in Ryu Kwang-hee, who used to be vice president in charge of the passenger service for Asiana Airlines, and also got a new capital infusion through the issuance of new shares, bringing its capital to 15 billion won.
Air Seoul is awaiting a license from the Ministry of Land, Infrastructure and Transport to run its passenger air flight services, submitting the application to the ministry in October.
Air Seoul will take over Asiana Airlines’s short- and mid-distance flights, as it wants to avoid flying air routes due to rather low profits from early next year.
An official at Asiana Airlines said the air carrier will remap its current international flight routes centered around more profitable routes around the world, such as flights to Shanghai and Beijing, and other major cities in the world, including New York, San Francisco, Los Angeles, Rome, Paris and London.
Kumho Asiana Group chairman Park Sam-koo signed a deal to buy back a controlling stake in the de facto holding firm of the group from creditors for 722.8 billion won ($605.96 million), six years after he lost control of the company.
The group announced recently that it entered into a stock purchase agreement to acquire Kumho Industrial — the key firm of the group’s governance structure — after a months-long tussle over the sale price with creditors. The creditors initially proposed 1.2 trillion won for the takeover deal.
With the acquisition of 50 percent plus one share in Kumho Industrial, the group’s chairman will return as the largest shareholder of the builder that came under creditors’ control in 2010 when its parent group ran into financial trouble after paying some 10 trillion won for acquisitions in 2006 and 2008.
“I will take the acquisition as the last chance and work with a renewed mind to contribute to the country’s economic development,” the 70-year-old chairman said.
Park should submit a funding plan to Korea Development Bank, the main creditor, within a month and make the full payment by Dec. 30.
Park is expected to join forces with other strategic and financial investors, such as domestic retail giants Shinsegae, CJ and Nonghyup Bank, to fund the multibillion-won deal, according to sources familiar with the matter.
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