The much publicize $730 million acquisition by Videocon-led consortium of Daewoo Electronics may end in the bin if creditors of the ailing Korean company reject a price cut demand by the proposed buyers.
Videocon-led consortium which also includes US-based equity firm Ripplewood, insist on a price cut of up to 13 per cent after conducting due diligence of Daewoo, sources in the know said that the creditors’ would take a call next week. If the creditors do not agree to the price cut, the process for sale of the company would start anew.
The officials of Videocon didn’t make any comment regarding the price cut, as well as on the issue of resistance by the creditors led by Woori Bank. Woori Bank has been running the company since the Daewoo conglomerate collapsed under $80 billion debt in 1999. It is believed that unless more than 75 per cent of the creditors agree to the proposal, the deal would be cancelled.