Korea Development Bank and other creditors of Kumho Tire have warned its former parent group that they will no longer come to the tire maker’s rescue should the sale of the company to China’s Doublestar Tyre fall through due to its caprice on trademark terms.

Under the renewed ultimatum, Kumho Tire could default on 1.3 trillion won ($1.14 billion) worth of bonds that mature this month, which makes the solvency of Korea’s second-largest tire maker hard to gauge.

In a meeting held on Tuesday, creditors decided that they will provide no more support for the cash-strapped tire company if the ongoing deal falls apart. Creditors believe the deal is essential to normalize Kumho Tire. Creditors also decided to seek to oust executives of Kumho Tire, including Park Sam-koo, chairman of Kumho Asiana, deprive Park of his purchasing rights to Kumho Tire and reexamine financial transactions with other Kumho companies.

Kumho Asiana Group that owns the trademark rights to Kumho Tire reaffirmed its previous position that the Qingdao-based firm should pay 0.5 percent of annual sales as trademark fees for the next 20 years.

Doublestar maintains that it cannot accept terms beyond the 955 billion won buyout deal signed with the state bank in March under which the company is asked to pay 0.2 percent of annual sales for using Kumho trademark and choose to drop the brand five years after the acquisition.

Kumho Asiana Group did not immediately respond to the creditors’ latest decision, saying the official request from creditors will be internally reviewed before drawing conclusions.

Creditors and Kumho Asiana Group have only 10 business days to hammer down their differences before early July when Kumho Tire’s operating capital runs out, as otherwise Kumho Tire would be headed for a bankruptcy court.

By Kim Jung-hwan and Chung Seok-woo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]