Thursday, Jul 29, 2010
(Adds Woori Bank reaction)
By Se Young Lee
Of DOW JONES NEWSWIRES
SEOUL (Dow Jones)--Iranian home appliance maker Entekhab Industrial Group is seeking to cut its offer for a stake in South Korea's Daewoo Electronics Co. to about KRW515 billion ($433.7 million) and will submit a final bid Friday, a person familiar with the situation said Thursday.
Entekhab, which was chosen as the preferred bidder for a stake in the South Korean company in April, initially submitted a bid of around KRW605 billion for a 97.5% stake held by creditor banks, the person said.
The person said Entekhab is now seeking a discount after identifying losses in Daewoo's books of around KRW230 billion following due diligence but added that the creditors believe this number to be too high. He said the final bid price could still change depending on last-minute discussions with creditors but added that KRW515 billion has already been informally offered.
The person said the creditors, which include Woori Bank, state-run debt clearing house Korea Asset Management Corp., Shinhan Bank and Korea Exchange Bank (004940.SE), will vote on the final offer sometime next week. Should they accept the offer, a formal agreement will be signed sometime in August.
The person said both Entekhab and the creditors are determined to get a deal done. This is the creditors fourth attempt to sell Daewoo Electronics.
A Daewoo Electronics official, who declined to be named, said queries about the sale process should be directed to the creditors and Entekhab.
An official at Woori Bank, the lead creditor managing the sale, said that negotiations are still ongoing. Entekhab officials could not immediately be reached for comment.
Previously, creditors of Daewoo attempted to sell the company to India's Videocon Industries, Morgan Stanley and U.S. private equity firm Ripplewood Holdings LLC. The sales were unsuccessful mainly due to differences over price.
Daewoo Electronics was placed in a debt rescheduling program after its parent group collapsed in 1999 under huge debt. After restructuring, the company now focuses on making ovens, washing machine and refrigerators.
Daewoo already has a relationship with Entekhab Industrial through selling its products to the Iranian company for the past few years.
-By Se Young Lee, Dow Jones Newswires; +82 2 3700 1904; vincent.lee@dowjones.com
(END) Dow Jones Newswires
29-07-10 0833GMT
