The much-hyped $3.2 billion sale of most of the assets of Daewoo Electronics to the little-known California investment firm, Walid Alomar & Assoc., seems to be turning into just that: hype.
In a copyrighted article, the Korea Herald reports that an official of the Hanvit Bank, which as lead creditor took over operations of Daewoo Electronics in mid-September, indicated there have been no meaningful sale negotiations with Alomar, and that the investment firm has not responded to the bank's request for details on how the funds would be raised to pay for the acquisition.
The bank official is quoted as saying "We do not place much importance on the negotiations with Walid Alomar. We will focus on the debt workout plan for the company," which is expected to be ready for submission to a general meeting of creditors later this week.
As reported in TWICE (October 11), Hanvit and other creditors are buying out the 7.5% interest in the electronics company held by the Daewoo Group and are turning it into an independent company. As previously announced, the reorganization plan is to call for a restructuring of the debt of Daewoo Electronics and to raise cash by selling off an unspecified amount of its overseas assets. The company has a major manufacturing operation in Mexico, where it produces color TVs, VCRs and picture tubes, as well as factories in Western and Eastern Europe, China and the mid-East.
Dan McGowan, senior VP/marketing for Daewoo Electronics America, said his company has no official word on the status of the Alomar deal, but "we do have contingency plans in place if the deal doesn't come together." The revamping activities in Korea has made the company "financially stronger now" than it was a few months ago and, "we now have an opportunity to go forward on our own as an independent company, without the backing of the Daewoo Group, and without any investment from an outsider. However, we will continue to explore outside investment."
Meanwhile, McGowan said, "business is very good for us," and the company is maintaining regular day-to-day operations and going ahead with its plans for digital TV products.