According to Maeil Business News, the creditors of Daewoo Electronics have ended talks with Electrolux after the Swedish electronics maker demanded a discount greater than 5 percent and expressed desire to divide Daewoo’s capital for a partial takeover
Creditors have called off all previous concessions that were made and are now considering restarting the entire sale. Reuters has reported that lead creditor, Woori Bank, rejected the demands and said “the only alternative is to start off with a clean slate.”
However, ongoing issues with preferred bidder, Iranian electronics firm Entekhab, have stalled the deal and put the entire sale in jeopardy. Entekhab failed to make payments and follow through with funding plans, pushing Daewoo’s creditors to move on to the second highest bidder, Electrolux.
Interestingly enough, the Iranian company has filed a lawsuit against the creditors on grounds that their contract was illegally terminated. This legal complication will make progression of the Daewoo Electronics sale difficult and prolonged.
This sale for a 97.5 percent stake in Daewoo Electronics has caught the attention of more overseas investors than domestic, since the company is unable to price their products competitively compared to local conglomerates like Samsung and LG, as well as rival companies in nearby China.
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