Ukraine company to bid for Daewoo assets

Ukraine's largest automobile company UkrAVTO (formerly known as Ukranian Automobile Corporation) is set to join the race for taking over Daewoo Motor India's assets worth Rs 800 crore at Surajpur in Uttar Pradesh. Others in the fray are Tata Motors and Mahindra & Mahindra.

Confirming this, sources close to the development said the three companies had done due diligence for taking over the closed manufacturing facility of Daewoo sprawling over 400 acres of land.

"All three companies have inspected the land and machinery lying in the facility. Since this is an asset sale, no examination of financials of the company is required," they added.

Asset Reconstruction Company of India (Arcil) took over the assets of the company after General Motors called off plans to buy Daewoo Motor India's car plant in Uttar Pradesh.

General Motors called off the deal as the government took a long time to reach an out-of-court settlement with the lenders to the beleaguered plant and Arcil on its customs dues. General Motors India had plans to introduce a small car, Chevrolet Spark, by using the production facility of Daewoo.

ICICI Bank, Industrial Development Bank of India (IDBI) and Exim Bank were the three main lenders to the project with an exposure (principal amount) of over Rs 1,000 crore.

Both ICICI Bank and Exim Bank sold their exposures to Arcil. IDBI has transferred its exposure to the stressed assets stabilisation fund "" a new unit created to take over the bank's non-performing assets.

Sources said if UkrAVTO's move fructified, it would be the maiden entry of a foreign car company through the auction process.

UkrAVTO owns the largest network of service stations, auto dealerships, fuel stations, manufacturing and assembling facilities in Ukraine.

UkrAVTO formed a 50:50 joint venture with Daewoo called Avtozaz-Daewoo for distributing Daewoo cars in Ukraine. After the bankruptcy of Daewoo in 2001, Daewoo's shares in the JV were taken over by UkrAVTO.

It currently manufactures cars for General Motors (particularly models originally designed for Daewoo) and assembles cars for Dacia.

UkrAVTO also builds cars under its own name, particularly the Slavuta and Tavria Nova models "" lines it inherited from the Soviet era. It also distributes cars for companies like Daimler Chrysler, GM, Toyota, Nissan, Dacia, Dongfeng Motors and Tata Motors.

General Motors had acquired Daewoo Motor's global operations, barring its India chapter, in 2000. The Debt Recovery Tribunal, Mumbai, had in March 2005, put Daewoo's assets in the Surajpur industrial area on sale.