(Associated Press via NewsEdge) The planned sale of South Korea's Daewoo Electronics to a consortium led by India's Videocon Industries has been scrapped mainly due to differences in pricing, an official at one of Daewoo's creditor banks said.
'Creditors of Daewoo Electronics have decided to end the deal as we have failed to narrow the gap with the Videocon consortium in pricing and other terms,' said Kim Young-soup, an official at South Korea's Woori Bank.
In October last year, the Videocon-led consortium agreed to buy 97.6% of Daewoo for 700 billion won ($749 million). But in early December, the Indian company demanded a 13% discount on the agreed price.
Daewoo Electronics, South Korea's third-largest electronics goods maker by sales, has been under a creditor-led debt-rescheduling program since 2000 after amassing huge debts.
Creditors, including Woori Bank and Korea Asset Management Corp., or Kamco, who collectively own 97.6% of Daewoo, have been seeking to sell the controlling stake since November 2005.
If the Indian consortium comes up with an 'acceptable and reasonable' price to acquire Daewoo Electronics, the creditors will consider sitting at the negotiating table, Woori's Kim said.
Talks will not resume unless Videocon revises its price, said Woo Jong-chul, a spokesman for Kamco, which has a 57.4% stake in Daewoo Electronics.
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