The ongoing fiasco of the final sale of assets of bankrupt Daewoo Motor India may lead to the break-up of the company into smaller chunks rather than the unit being sold off as one concern.
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The initial sale offer was for the whole plant and complete assets of DMIL but lack of buyer interest may result in the Asset Reconstruction Company of India (ARCIL) selling it in parts.
The Surajpur plant has now been on the market for over two years but potential buyers have run into problems over the now-defunct car major’s EPCG liabilities to the government.
The matter has reached the Supreme Court, but there are ongoing discussions between the financial institutions, ARCIL and the government over an out-of-court settlement. The negotiations have led to a 45:55 agreement in which the proceeds will be split between the stake holders with 45% going to the lending institutions.
The agreement will be signed once the EPCG liability is settled in court.
The earlier government valuation of the Surajpur assets pegged the plant at INR6.0bn, but the lenders value it in the range of INR12.0bn to INR14bin.
After GM opted out of purchasing Daewoo India, many previous bidders have again shown interest in the plant including Mahindra & Mahindra, Tata Motors – and GM Russian associate company AvtoVAZ, which has indicated an interest in transferring the assets to a new engine plant outside Moscow.
Deepesh Rathore/Tilak Swarup
