SEOUL/TEHRAN, June 2 Iran's Entekhab Industrial Group threatened on Thursday to take legal action to stop the sale of unlisted Daewoo Electronics Co Ltd after top shareholders of Daewoo decided to drop the an earlier deal with the Iranian group over funding uncertainties.
Officials from major shareholders Korea Asset Management Corp and Woori Bank said earlier this week that they planned to tap reserve bidder Swedish electronics firm Electrolux AB (ELUXb.ST) to revive the $513 million stake sale after rejecting a request by Entekhab to cut the acquisition price by about 60 billion won ($55.6 million). [ID:nL3E7GU13J]
The move is the latest twist in the prolonged sale process, which creditors-turned-shareholders had hoped to wrap up after a series of earlier failures.
The unlisted Iranian group was picked as preferred bidder for Daewoo last year, beating Electrolux, but it has repeatedly failed to satisfy creditor demands for a detailed funding plan, resulting in several months of delays to the final agreement.
"Entekhab Group, the biggest business partner with Daewoo Electronics, will review its decision on the continuation of its cooperation with Daewoo and preserve its right to completely halt its business activities with Daewoo if the company fails to offer a way out of this crisis," Entekhab said in a statement carried by Iran's Students News Agency. "We warn the company that the nullification of the contract is illegal and we will follow up the case through the court to stop any deal on the company, if Daewoo fails to offer a solution for this problem."
Daewoo said revenue generated from Entekhab accounted for less than 5 percent of total sales last year, but declined to comment further.
It is the fourth attempt by creditors to sell Daewoo, which primarily makes washing machines and refrigerators. ($1 = 1078.350 Korean Won) (Reporting by Miyoung Kim in SEOUL and Parisa hafezi in TEHRAN; Editing by Chris Lewis)