The creditors of Daewoo Electronics have rejected the proposal of the Videocon Industries-led consortium to acquire the company for a lower price, with a part of the proceeds being invested in the company in the form of convertible bonds. | |
| However, a source close to the development said this did not mean that Videocon's plan to acquire Daewoo had been dropped, as it had offered partially revised proposals. |
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| The creditors, which hold a 97.5 per cent stake in Daewoo, were displeased with the proposal and put it to vote. The proposal required consent of 75 per cent of the creditors. |
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| Videocon Industries and RHJ International, the holding company of US buyout fund Ripplewood, had signed a memorandum of understanding to acquire Daewoo for $750 million, subject to due diligence, by December-end. Since that time, the creditors have been in talks to fix the terms of the transaction. |
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| On completion of due diligence, the consortium offered to pay 5 per cent less than the price and also asked the creditors to invest a part of the proceeds in the company in the form of convertible bonds. |
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