Creditors of South Korean tyre manufacturer Kumho Tire Company plan to sell their combined stake in the company to China's Qingdao Doublestar Company, according to local reports.

Kumho Tire was placed under a creditor led debt work out programme in 2009 after the company suffered a liquidity crisis following the acquisition of Daewoo Engineering and Construction Company.

Qingdao Doublestar was chosen as the preferred bidder for the Kumho Tire stake in January despite efforts by the chairman of Kumho Asian Group, the parent company, to buy back control of the heavily indebted business. 

The Korea Development Bank and other creditors were expected to sign a sale agreement with Qingdao Doublestar to sell their combined 42.1% in Kumho Tire.

The value of the purchase is expected to be around KRW1 trillion (US$871m), which is the amount Qingdao Doublestar is understood to have offered in January.