Kumho Asiana Group Chairman Park Sam-koo confirmed Tuesday that he will not exercise the right of first refusal on the sale of a controlling stake in Kumho Tire.

Calling the process of selling led by state-run Korea Development Bank “unjust and unfair,” Kumho Asiana said it will “no longer participate in the sale.”

This decision means the 42.01 percent controlling stake in Kumho Tire will be sold to Chinese tire maker Doublestar, which signed a stock purchase agreement with creditors in March.

Doublestar and Kumho Tire’s nine creditors have to seal the deal worth 955 billion won ($831 million) within six months.

If Doublestar does not buy the controlling stake within the time frame, it would lose its status as the preferred bidder and Park would be given a new pre-emptive right.

Kumho Asiana also urged creditors for a fair rebid and to allow Park to form a consortium through a press release.

The group will not initiate legal actions against creditors for now, Kumho Asiana said.

“Taking the acquisition to court is burdensome for the entire Kumho Asiana Group. There are unresolved issues Doublestar and the nine creditors have to agree on, which Park seems to view as unlikely to be settled within six months,” said Lee Sang-hyun, an analyst at IBK Securities.

Doublestar’s use of the Kumho Tire trademark is an obstacle Doublestar and the creditors have to overcome.

Creditors and Doublestar agreed on a maximum 20-year use of the Kumho Tire trademark, which has not yet been negotiated with the trademark rights holder Kumho Industrial.

“It is important for the Doublestar to use the trademark, as the Chinese tire maker produces tires for commercial vehicles,” said Lee.

“The Chinese firm may refuse to proceed with the deal or to pay the full price without access to the Kumho Tire trademark.” 

By Kim Bo-gyung (lisakim425@heraldcorp.com)