The Debt Recovery Tribunal (DRT) in Mumbai has issued a new notice to bankrupt Daewoo Motors India Ltd (DMIL) demanding the placement of the company’s assets on the open market so the facility in the Surajpur Industrial Area can be sold.
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Khade Bapat Kabe Sinha & Associates, the DRT receiver, on March 9 issued the ‘offer for sale of assets’ which lists blocks of assets for sale to recover some of the money owed to debtors.
The reserve price is INR11.03 billion for all DMIL property, excluding current assets.
General Motors India has previously shown interest in the assembly plant at Surajpur which is valued at INR5.65 billion, while the plant and machinery in isolation carries a reserve of INR4.08 billion. The land, building and structures are valued at INR1.57 billion.
Though GM was interested in buying the company, it did not want to take responsibility for the liabilities and will negotiate on price only after all encumbrances against Daewoo Motors have been cleared.
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By GlobalDataICICI Bank, IDBI and Exim Bank are exposed to Daewoo Motors India to the tune of an estimated INR10 billion. The long drawn-out process to liquidate the Korean car maker, which began in 2002, has seen many suitors withdraw bids to acquire the company.
Negotiations with the Debt Recovery Tribunal have ended without result and auctioning the company’s assets in chunks seems to be the only viable option.
Deepesh Rathore / Tilak Swarup
Editor’s note: GM India was reported recently by a US magazine as having said that the former Daewoo India assembly plant was now effectively junk because its machinery has not been properly maintained since car building ceased.
