Videocon, Daewoo deal finally scrapped
Daewoo's creditor bank said that the deal has been scrapped due to differences in pricing.
By Agencies |
SEOUL: The planned sale of South Korea's Daewoo Electronics Corp to a consortium led by India's Videocon Industries Ltd has been scrapped mainly due to differences in pricing, an official at one of Daewoo's creditor banks said Friday.
"Creditors of Daewoo Electronics have decided to end the deal as we have failed to narrow the gap with the Videocon consortium in pricing and other terms," said Kim Young-soup, an official at South Korea's Woori Bank.
In October last year, the Videocon-led consortium agreed to buy 97.6 per cent of Daewoo for 700 billion won ($749 million; euro573 million).
But in early December, the Indian company demanded a 13 per cent discount 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 amassing huge debts. Creditors, including Woori Bank and Korea Asset Management Corp, or Kamco, who collectively own 97.6 per cent of Daewoo, have been seeking to sell the controlling stake since November 2005.
On Thursday, Kamco said the planned sale would likely fail due to the differences in pricing. "We notified the other main creditor, Woori Bank, that we can't accept the prices suggested by Videocon last month," Kamco spokesman Woo Jong-chul said.
"Creditors of Daewoo Electronics have decided to end the deal as we have failed to narrow the gap with the Videocon consortium in pricing and other terms," said Kim Young-soup, an official at South Korea's Woori Bank.
In October last year, the Videocon-led consortium agreed to buy 97.6 per cent of Daewoo for 700 billion won ($749 million; euro573 million).
But in early December, the Indian company demanded a 13 per cent discount 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 amassing huge debts. Creditors, including Woori Bank and Korea Asset Management Corp, or Kamco, who collectively own 97.6 per cent of Daewoo, have been seeking to sell the controlling stake since November 2005.
On Thursday, Kamco said the planned sale would likely fail due to the differences in pricing. "We notified the other main creditor, Woori Bank, that we can't accept the prices suggested by Videocon last month," Kamco spokesman Woo Jong-chul said.
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