Korea's ailing tire manufacturer, Kumho Tire, has avoided being placed under court receivership after its labor union backed a plan to sell the firm to Chinese truck and bus tiremaker, Doublestar.
Under the plan,... the Chinese company has vowed to invest some six-hundred million U.S. dollars into Kumho Tire.
Kim Hyo-sun tells us more.
Cash-strapped Kumho Tire has avoided bankruptcy as its labor union on Sunday voted in favor of selling the company to its Chinese rival, Doublestar.
Sixty percent of its union okayed the sale plan,... under which,... the Chinese tiremaker buys a 45 percent stake in Kumho Tire for approximately 600 million U.S. dollars through a third-party capital increase.
Doublestar has also vowed to secure jobs for Kumho's five-thousand employees for three years after acquisition.
To get the company back on track,... Kumho's union members also agreed on a wage freeze until 2019 and returning parts of their work benefits.
After Kumho's creditors sign a memorandum of understanding with the tire manufacturer on Monday,... they will proceed to signing a sales contract with Doublestar before the end of June,... according to its main creditor, the Korea Development Bank.
Apart from the sales deal,... Kumho's creditors will also inject around 190 million dollars in additional funds to cover the firm's debts of over two-point-two billion dollars.
Kim Hyo-sun, Arirang News.