Daewoo creditors turn down Dhoot bid

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.

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.

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.

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.