Daewoo creditors call off deal with Videocon

The creditors of Daewoo Electronics, led by Woori Bank and Korea Asset Management Corp. (Kamco), rejected the Videocon offer to buy Daewoo Electronics. The deal was scrapped mainly due to differences in pricing.

In October 2006, the Videocon-led consortium agreed to buy 97.6% of Daewoo for 700 bn won ($749 mn; €573 mn), but later demanded a 13% cut on the agreed price. Daewoo Electronics, South Korea’s third-largest electronics goods maker by sales has been under a creditor-led debt-rescheduling program since 2000 after collapsing under huge debts, amounting to around $80 bn.

Read The Economic Times and Business Standard articles.

Related Posts:
Videocon’s Daewoo acquisition in jeopardy
Videocon may agree to a less than 10% cut in bid price for Daewoo Electronics; budges from earlier demand of a 15% cut

Videocon’s Daewoo acquisition in jeopardy

Videocon along with US-based private equity firm Ripplewood have proposed a price cut of up to 13% on the $730 mn acquisition of Daewoo Electronics after conducting due diligence of Daewoo. This has not gone down well with the creditors of Daewoo who are collectively running the company since the Daewoo conglomerate collapsed under $80 mn debt in 1999.

The creditors, led by Woori Bank, are going to come to a decision regarding the price cut in the first week of January 2007. Unless more than 75% of the creditors agree to the proposal, the deal would be cancelled. In case creditors did not agree to the price cut, the process for sale of the ailing company would have to start afresh. Videocon officials refused to comment on the issue.

Read The Financial Express article.