The planned $3.2 billion acquisition of most of the assets of Daewoo Electronics by Walid Alomar & Associates, a California investment group, may have some new hurdles to overcome in the wake of a management takeover of the Korean company by its bankers.
Daewoo Electronics, along with Daewoo Heavy Industries and Daewoo Telecom, were all put under operating control of creditor banks with the blessing of Korea's Financial Supervisory Commission. The action, taken September 6, is designed to guarantee the availability of operating funds to the debt-heavy subsidiaries of the financially troubled Daewoo Group.
According to reports from Korea, Hanvit Bank, the company's main creditor, will now handle negotiations for the sale of most of the assets of Daewoo Electronics. Hanvit said it expects a report on the takeover proposal from Walid Alomar next week, and that it plans a detailed examination of the purchase proposal and the investment firm's funding status, including just how it plans to pay for the assets.
Last month Alomar signed a letter of intent to acquire the Korean, European and North American assets of Daewoo Electronics. Daewoo Group will be left with operations in China and Eastern Europe, as well as the remaining $1.3 billion of the electronics businesses $4.5 billion debt.
The cash infusion, when it comes, will do little to ease Daewoo Groups $47.7 billion debt load.