labels: videocon
Videocon's acquisition of Daewoo hangs in balance news
29 December 2006

Mumbai: The $730-million acquisition of Daewoo Electronics could fizzle out if the ailing Korean giant's creditors reject the price cut demand by the Videocon-led consortium's of proposed acquirers.

After completing its due diligence on Daewoo, Videocon and its partner private equity firm Ripplewood have insisted on a price cut of up to 13 per cent. The creditors will respond next week.

Over 75 per cent of the creditors would have to be amenable to the price cut, failing which, the proposed acquisition would be cancelled. In that case fresh bids would have to be invited.

Dewoo's creditors, led by Woori Bank have been collectively running the company since the company collapsed under $80 billion debt in 1999.

Financial Times of London has quoted Park Jun Tae of Woori Bank as saying that ''the deal could be nullified... we expect it will take one or two days to get the result as each of the creditors has to choose whether they agree or disagree with Videocon's proposal."

The Videocon consortium had proposed to boost capital investment in Daewoo pending the completion of the due diligence, after which their offer price could be adjusted accordingly.

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Videocon's acquisition of Daewoo hangs in balance