In a bid to recover huge dues worth over Rs 1,000 crore,
Industrial Development Bank of India (IBBI), Exim Bank
and ICICI have decided to restart the operations of Daewoo
financial institutions (FIs), which took over the management
control of Daewoo India two months ago, have appointed
its nominee V K Saxsena as chairman and managing director
of the company. Production at Daewoo Motors Surajpur
factory at Noida will start soon, say sources.
a senior FI official: The FIs have chalked out a
two-pronged strategy to revive the ailing Daewoo Motors.
On the one hand, the lenders intend to have its nominee
directors on the board to avoid asset stripping, and also
to work out a revival package. On the other, they are
in negotiations with all domestic and international carmakers
to pick up the Daewoo India unit.
at the Surajpur factory stopped in July 2002. The 500
cars already produced have been lying unsold in the factory
premises and the kits imported last year for 2,000 cars
are lying unused. The official says the FIs have already
asked the customs and excise department to issue new export
licences in favour of the institutions to meet the export
obligations of Daewoo Motors.
July, the central customs and excise department had cancelled
five of Daewoos export licences and invoked bank
guarantees worth Rs 26 crore. These guarantees were executed
by Daewoo in lieu of the export obligations in its licence
agreement with the director general of foreign trade.
customs department was to encash the Rs 26-crore bank
guarantees from Punjab National Bank and HDFC Bank. The
cancelled licenses of Daewoo Motors were valid up to 2003.
We are even willing to give the firm the necessary
working capital for restarting operations at a decent
scale. But our first priority is to create a market for
the unsold goods in the factory, adds the official.
company, which manufactures the popular small car Matiz,
has an outstanding debt of around Rs 980 crore received
as project finance from IDBI, ICICI and Exim Bank. Of
the total, $150 million is dollar-denominated debt, taken
during 1996 for initial investments in the Indian subsidiary
and the plant.
remaining $48 million was rupee-denominated debt taken
in 1998 for further investments in the Matiz project,
and the balance is the interest cost. The company had
also borrowed another Rs 400 crore from the FIs and various
banks for its working capital arrangements.