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Our Bureau

`Deal unlikely to be wrapped up by year-end'

Mumbai , Dec. 26

Videocon Industries seems to be pushing for a discount on the price negotiated in October for acquiring South Korea's sick Daewoo Electronics.

Sources said the Videocon-led consortium has sought a 13 per cent discount on the agreed price of about Rs 3,200 crore for the buyout.

The creditors of Daewoo, who are selling their 97.6 per cent stake in the Korean electronics firm, are likely to put on hold the planned sale and may even snap further price talks, according to reports in foreign news wires.

Mr Venugopal Dhoot, Chairman of Videocon Industries, was not available for comment while Daewoo's creditors declined to confirm the report.

A foreign news agency, however, quoted an official of Woori Bank, one of the Daewoo's creditors, as saying that "there are some conditions attached to Videocon's final offer and we are reviewing them." The deal is unlikely to be wrapped up by the end of this year as planned, the official said.

Videocon Industries Ltd, with its consortium partner Belgium-based holding company RHJ International, signed an MoU on October 20 with the creditors of Daewoo, including Woori Bank and Korea Asset Management Corp. The proposed aggregate consideration for the purchase of the creditors' share in Daewoo was about Korean won 700 billion (about $730 million).

Creditors hold 97.6 per cent stake in Daewoo, after the Korean company came under a debt-restructuring programme, following its insolvent parent, Daewoo Group, being kept under a workout. The creditors have been seeking to sell their controlling stake in the Korean outfit since November 2005.

Videocon's move to acquire Daewoo was to be its third major acquisition in the last one year, after it took over Thompson's global picture tube business for about Rs 1,260 crore and Electrolux Kelvinator India, the Indian subsidiary of A.B. Electrolux of Sweden.

More Stories on : Consumer Electronics | Mergers & Acquisitions | Corporate Disputes

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