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Daewoo Group Is Breaking Up

Daewoo Electronics is one of seven Daewoo Group companies set to be spun off and become independent entities. Among other companies slated to be cut loose from the group by the end of this month are Daewoo Electronics Components, Daewoo Telecom and Orion Electric.

Creditors, led by Korea’s Hanvit Bank, plan to acquire the 7.5% Daewoo Electronics stake held by group companies and speed up the restructuring and overseas asset sale effort. Hanvit, it’s understood, is still evaluating the $3.2 billion offer for the Korean, U.S. and European assets of Daewoo Electronics made by venture capital firm Walid Alomar & Associates.

Korea’s Financial Supervisory Commission has given the company permission to ease its cash crunch by refinancing bonds and commercial papers at prices representing 70% to 80% of book value. Last week the creditors were discussing providing $270 million in new funding to keep Daewoo Electronics going through the end of this year.