China’s Doublestar Tyre has bought 45 percent stake in South Korean tyremaker Kumho Tire. The move has got the nod from the workforce of the latter. It is learnt that job guarantee has been provided to employees for a period of three years.

With its investment of KRW 646.3 billion (£434.3 million) through third-party allocation, Doublestar will become the largest shareholder in Kumho Tire. Following the issue of fresh shares, Kumho Tire’s creditors will together own a 23.1 percent in the company (earlier it was 42.01 percent).

The Kumho brand name will remain in use and its management independent post-acquisition. Reports said that Kumho Tire, its union, main creditor the Korea Development Bank and Doublestar have agreed to form a ‘future committee’ to help turn the troubled tyre maker around.