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Biz News Korea(Eng)

Kumho Busline to sell stakes in overseas joint ventures

Collected: 2017.01.20

Distributed: 2017.01.23

Source: Go Direct

Kumho Busline Co. (formerly Kumho Express) has agreed to sell its stakes in overseas joint ventures to Hankook Capital Co., a subsidiary of the Military Mutual Aid Association, for about 70 billion won ($59.6 million), a move that would further normalize Kumho Asiana Group recovering from liquidity squeeze and workout program since the 2008 financial crisis.

According to investment banking sources on Wednesday, Hankook Capital agreed to raise a private equity fund worth roughly 70 billion won to acquire a combined 49 percent share in overseas joint ventures established by Kumho Busline. Kumho Busline runs 12 joint ventures in China and Vietnam and it controls 49 percent of the companies. Hankook Capital is scheduled to complete the transaction within this month.

When the transaction is sealed, Consus KHB owning a full stake in Kumho Busline would be able to repay a maturing debt of 70 billion won that it borrowed to buy Kumho Busline. The upcoming repayment is expected to allow Kumho & Co., the holding company of Kumho Asiana Group, to buy back Kumho Busline from Consus KHB. Kumho Asiana Group sold off Kumho Busline to Consus KHB with a call back option in 2015 in order to finance its acquisition of Kumho Industrial Co.

Kumho & Co. was launched last June through a merger between Kumho Corp. and Kumho Terminal. Until then, Kumho Corp. had been serving as the holding company of Kumho Asiana Group. Once Kumho Asiana Group regains control of Kumho Busline, it is expected to combine Kumho & Co. and Kumho Busline to create a lucrative business that generates 100 billion won cash each year.

By Kang Doo-soon and Song Gwang-sup

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