to sell South Korea’s Daewoo Electronics Co. to an Iranian appliance maker after the Iranian firm had delayed payments for months and has now sought to cut the sale price it agreed to by 10 percent.
Officials from Korea Asset Management Corp and Woori Bank—Daewoo’s major creditors who have now become its major shareholders and sought to sell off the firm—told Reuters and Bloomberg they had decided to drop the deal to sell the electronics firm to Iran’s Entekhab Industrial Group.
The Koreans were now expected to turn to Swedish electronics firm Electrolux AB, which came in second to Entekhab last year in the bidding for Daewoo. Electrolux, perhaps expecting the deal with the Iranian company to collapse, has repeatedly said it was still interested in buying Daewoo.
There has been speculation that international sanctions, especially banking restrictions, had made it hard for Entekhab to pay. But the Koreans most involved in the deal have not blamed sanctions.
A source who declined to be named told Reuters that Entekhab made a request to cut the agreed price of 577.7 billion won ($534.9 million) by about 60 billion won ($55.4 million), but the request was not accepted.
The Iranian appliance maker offered the 577.7 billion won last November to win the bid, but it has repeatedly failed to satisfy creditor demands for a detailed funding plan, let alone make any actual payments beyond a 12 percent deposit. The deadline for the payment plan had been extended three times by the shareholders before they decided this month to cease dickering with Entekhab.
Last November’s deal with Entekhab was the fourth attempt by creditors to sell Daewoo Electronics, which primarily makes washing machines and refrigerators.
Daewoo Electronics, which has been under a debt-rescheduling program since August 1999, is a former subsidiary of the now-defunct Daewoo Group.
Entekhab has said it aims to claim 10 percent of the Middle Eastern and African regional markets within the next three years and build up its own reputation.