Seoul - Kumho Tire creditors have come up with a new offer for the use of the Kumho trade mark in a bid to resolve a dispute over royalty rates for the brand, reports say.
According to the Chosun Biz news website on 6 July, the creditors, led by Korea Development Bank, are planning to set the royalty rate at 0.35% of annual sales.
This will meet half-way, the creditors' initial offer of 0.2% and Kumho Asiana Group’s chairman Park Sam-Koo's claim of 0.5%.
The issue has threatened a deal for the sale of a majority holding in Kumho to China’s Doublestar Tyre Co.
In March , Doublestar signed a KWR995 billion (€778 million) agreement with Kumho creditors to acquire a 42.01% stake in the Korean tire company.
As reported by ERJ, Park raised the trademark fee for Doublestar from 0.2% to 0.5% of annual sales in June, while raising the term for the use of royalty duty from five years to 20 years.
According to the Chosun Biz story, the new counter-offer by Kumho creditors revises the royalty years down to 12.5 years.
The report added that if Park fails to accept the offer, “Kumho Tire will be sold off, and Park will likely withdraw from Kumho Tire executives.”
On 22 June, Korean business news website Pulse News reported that Kumho Tire’s operating capital will run out in early July.
If the two sides fail to agree, the tire company could be left facing an uncertain future, said the report.