While General Motors initially did not acquire Daewoo’s Indian operations when it bought most of the bankrupt company’s global operations from the creditors in 2002, the Indian operation is now about to be added to the GM stable.
General Motors India is about to complete the due diligence process to acquire the car assembly unit of Daewoo Motors India and will then be make a formal request to the Debt Recovery Tribunal (DRT) to take over the unit.
Due diligence was initially expected to be completed in three months but took about six months due to problems over valuing assets.
GM is likely only to take over the car plant, leaving the transmission, axle and engine plants to be sold off separately. Companies that have shown interest include Rico Auto in partnership with Hi-Tech Gears, Mahindra & Mahindra and two firms from Russia and Italy.
General Motors needs the car plant to manufacture the Chevrolet Spark, a variant of the Daewoo Matiz, to enter the high-volume, small car sector in India.
Financial institutions have precedence over Indian government claims on Daewoo Motors’ assets. Thus the finance companies will hold the first charge on Daewoo Motors’ assets for recovery of liabilities estimated at about INR15 billion (€258 million).
Deepesh Rathore / Tilak Swarup