| Assocham president V.N. Dhoot (left) and secretary-general T.S. Rawat in Calcutta on Sunday. Picture by Sanjoy Chattopadhyaya
Calcutta, Feb. 18: The Videocon group consortium is set to snap up Daewoo Electronics, according to group chairman Venugopal N. Dhoot.
“We are very close to clinching a deal with Daewoo Electronics. Discussions are on with the creditors and we have almost managed to wrap up the funding and pricing issues. I cannot comment on whether very soon would be next month, but can only say that it is expected to happen very soon,” Dhoot in the city on an Assocham mission said.
Earlier this month, the consortium submitted a revised bid after Daewoo’s creditors rejected the original proposal in December. Differences had cropped up between the two over price and other terms of the deal.
Sources in the company had reportedly said the results of the revised bid are expected in a month. US-based private equity fund RHJ International, which is the holding company of US buyout fund Ripplewood, is Videocon’s partner in the consortium.
The consortium had initially demanded a 13 per cent discount on the initial bid price of $752 million for the creditors’ 97.6 per cent stake in Daewoo Electronics, which was rejected.
Videocon’s rival in the new bidding was MBK Partners, the South Korean equity fund, set up by the former employees of US-based Carlyle Group.
Daewoo’s creditors, including Woori Bank and Korea Asset Management Corp, hold the 97.6 per cent after it was brought under the creditor-led debt restructuring programme. The creditors were looking to sell the controlling stake since November 2005.
Industry sources said Videocon’s chances have improved since the creditors wanted to offload the company’s assets to a consumer durables firm.
If the deal happens, it will be Videocon’s third major acquisition in the last one year. It also took over Thomson’s global colour picture tube manufacturing business for about Rs 1,260 crore and the Indian operations of Electrolux.
The company is also reportedly in talks with Thailand-based Thai CRT, one of the world’s leading television picture-tube makers.
The company has also announced investments worth Rs 6,100 crore on a greenfield liquid crystal display (LCD) panel manufacturing plant in Italy.
The 150-acre facility will produce 5.76 million LCD panels. It will employ around 1,000. Videocon is already present in Italy through the acquisition of Thomson’s picture tube factory in the country.