Videocon may get final approval from Daewoo creditors

04 May 2007

Mumbai: Daewoo Electronics creditors may soon authorise the Seoul-headquartered Woori Bank, a member of the lenders'' consortium, to sign the final documentation with the Videocon-led consortium on May 4.

The parties have been coming to an agreement during the month-long negotiations, resulting in the Videocon-led consortium agreeing to certain key issues. The creditors have agreed to a price of around 700 billion Korean won, taking the total enterprise value to $1 billion, sources said.

The complete documentation is expected to take six to eight weeks. Videocon officials refused to comment on the development. The company had earlier threatened to abandon the bid after failing to get the 40-odd Daewoo creditors to arrive at a mutually agreeable financial deal, sources said.

The deal would help Videocon reach out to emerging markets like Mexico, Poland, Vietnam and Chile and developed markets like the US, France, Japan; besides benefiting from the OE relationship with Maytag, USA and Bosch-Siemens, Germany.

The Videocon-led consortium emerged as the preferred bidder in September 2006 to buy a controlling 97.6 per cent stake in Daewoo Electronics. Daewoo has been under a creditor-led debt-restructuring programme since 2000 after its insolvent parent Daewoo Group was put under the workout programme.