Videocon to buy Daewoo Elec
Creditors of South Korea’s Daewoo Electronics have signed an initial deal to sell the country’s third-largest electronics maker to a consortium led by Videocon Industries of India, officials said on Monday.
The memorandum of understanding signed on Friday calls for the consortium to buy the electronics firm for $730 million.
The acquisition price is subject to change after a month-long review, the creditors – including Korea Asset Management Corporation and Woori Bank – were quoted by Yonhap news agency as saying.
The consortium is made up of Indian consumer electronics manufacturer Videocon and Ripplewood Holdings, a US private equity fund. It was picked as preferred bidder for the Korean company in early September.
Daewoo Electronics is a former unit of the Daewoo Group, which collapsed in 1999 under USD80 billion in debts.
Last month the firm expressed strong support for the proposed takeover but appealed for greater investment.
The takeover is the "only realistic option" to save the firm, which is now in the seventh year of a debt workout programme, Daewoo Electronics said in a statement.
"The reason for our active push for a merger and acquisition is the company’s desperate need for investment in technology development," president Lee Seung-Chang told reporters at the time.
"It has no meaning at all to have a new owner without any business investment coming along. We want a bigger level of investment than now."
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