Dhoot''s bid for Daewoo fails

19 May 2007

Seoul: The deal led by Videocon Industries to acquire South Korea''s Daewoo Electronics for $750mn has collapsed owing to disagreements over price and other payment issues, Daewoo''s creditors said on Thursday.

Korea Asset Management Company, (Kamco) Daewoo''s biggest creditor, and Woori Bank, which have led the sale, said creditors rejected Videocon''s latest revised offer on May 7.

Kamco said the Videocon consortium asked for a big cut from the price offered in the memorandum of understanding, which could not be accepted. They said they were no longer in talks with the Indian consumer electronics company and were now focusing on restructuring Daewoo and returning it to profit ahead of a potential sale to alternative buyers.

A Woori official said: "The company''s situation is deteriorating. We want to normalise its operations so that it can fetch a fair price later."

Creditors said they would not block Videocon from joining any future auction for the South Korean electronics company.

Creditors have run Daewoo since the conglomerate collapsed, with $80bn of debt in 1999. They own 98 per cent of the company. The company reported a net loss of Won183.5bn ($198m) last year, compared with a Won 79.7bn loss in 2005.