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UPDATE 1-Kumho Tire shares skid 30 pct on report of possible court receivership
December 7, 2017 / 2:24 AM / 11 days ago

UPDATE 1-Kumho Tire shares skid 30 pct on report of possible court receivership

(Adds KDB, Kumho Tire comments)

SEOUL, Dec 7 (Reuters) - Shares in South Korean tyre manufacturer Kumho Tire shares plunged by close to the daily trading limit of 30 percent on Thursday after a South Korean newspaper reported the company could be facing a court-led debt restructuring program.

The Sekye Ilbo newspaper, citing an official familiar with the matter, said that the Korea Development Bank (KDB), one of Kumho Tire’s creditors, may seek a prepackaged restructuring plan, which would allow Kumho to enter into receivership administered by a court.

Kumho Tire said nothing in the matter had been decided, noting a due diligence examination was underway on the company, which entered a voluntary restructuring agreement with creditors in September.

KDB said it aims to complete the due diligence by the end of this year.

Shares of Kumho Tire dropped by almost the daily limit of 30 percent on Thursday, marking their biggest intraday percentage loss since November 2010. The shares touched their lowest intraday level in three months.

In September, KDB and other creditors terminated their $872 million deal to sell a stake in Kumho Tire to China’s Qingdao Doublestar Co after Qingdao Doublestar demanded a reduction in the price of the stake, citing a deterioration in the tyremaker’s profits. An over-ambitious acquisition strategy run by Kumho Tire’s former parent company before the global financial crisis left the conglomerate saddled with debt, leading to Kumho Tire being put under a creditor-led debt restructuring in late 2009. ($1 = 1,094.9000 won) (Reporting by Hyunjoo Jin and Dahee Kim; Editing by Eric Meijer)

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