GERMANY: DaimlerChrysler Seeks Daewoo Parts
"Daewoo is a very difficult case," Juergen Schrempp told the Frankfurter Allgemeine Zeitung. "A takeover of Daewoo is out of the question for us."
Daewoo, buried under $18 billion of debt, is being auctioned off by its creditor banks. DaimlerChrysler and South Korea's Hyundai Motor submitted a joint bid Monday, as did General Motors Corp. in tandem with Italy's Fiat SpA [NYSE:FIA]. Ford Motor Co. made a solo bid.
"We'll participate in the bidding procedure only to identify possibly attractive individual parts of the company," Schrempp said.
Bidding allows DaimlerChrysler to look behind the curtains at Daewoo, with special access to its financial books and strategic planning. The Stuttgart-based automaker said bidding was one way to find out which parts of the company could be cleaved off and salvaged.
On Monday, DaimlerChrysler acquired a 10 percent stake in Hyundai, South Korea's leading carmaker, for $428 million. The deal was aimed at advancing Hyundai's plan to become one of the world's top five automakers by 2010.
Korean government officials have said they would only approve a Hyundai bid if the Korean carmaker joined with a foreign company to avoid a potential monopoly.
Daewoo's creditors plan to select two finalists by Friday and one successful bidder by the end of September. The successful bidding price is expected to reach $3 billion.
Daewoo has the capacity to make 2 million vehicles a year in plants stretching from the Philippines to Poland. But Daewoo borrowed heavily to expand, and cash flow from operations eventually fell short. Then the Asian currency crisis hit South Korea in late 1997.
Last year, Daewoo Motor lost $3.9 billion on revenues of $5 billion. Creditors demanded a major overhaul, and a restructuring committee began seeking a buyer.