Videocon still in race for Daewoo Elec

Even as creditors of ailing Korean giant Daewoo Electronics send signals of rejecting the revised bid of Videocon-RHJ consortium, the Mumbai-based Videocon Industries maintains that they are still in the race to take over the company.

Venugopal Dhoot, chairman and MD of Videocon Industries, maintained that he is still in the race to take over Daewoo's electronics business. However, he maintained that he cannot pay more than what would be commercially viable.

Dhoot said, "We want commercial viability from the deal. We do not want to pay an exorbitant price." In October last year, the Videocon-led consortium was shortlisted for buying a stake in the ailing South Korean electronics major.

After a due diligence process, the Videocon consortium in December asked for 13 per cent discount on the initial bidding price of $ 752 million to acquire 97.5 per cent stake in the company. But this was rejected by Daewoo's 40-odd creditors and Videocon lost its preferred bidder status. The bid was found unacceptable.

Later, Videocon submitted a revised bid to the creditors and the bid came up for consideration last month. Daewoo Electronics is a former unit of the Daewoo group, collapsed in 1999 with $80 billion in debt in one of the world's largest corporate failures.

Trailing Samsung Electronics and LG Electronics, it posted net profit of 93.9 billion won on sales of 2.15 trillion won in 2005. It produces a range of goods including TVs, air-conditioners and washing machines. The proposed acquisition fits into Videocon's strategy to become an Indian multinational as Daewoo operates six plants in South Korea and 18 overseas units.