Banks end talks to sell Daewoo Elec to Ripplewood
SEOUL (Reuters) - Creditors of Daewoo Electronics have ended talks to sell the South Korean appliance and TV maker to U.S. private equity firm Ripplewood Holdings and would look at ways to restructure Daewoo, a bank official said on Wednesday.
The collapse of the talks marks the third failed attempt to sell loss-making Daewoo. Tighter credit in the aftermath of the global financial crisis and falling asset values have seen many acquisition deals fall through around the world.
Ripplewood was picked in late October as the favoured bidder for Daewoo, formerly part of the failed Daewoo Group and now owned by creditors. A bid price has not been disclosed.
A consortium of India's Videocon Industries (VEDI.BO) and RHJ International (RHJI.BR), the holding company for Ripplewood, was initially picked as a buyer but the talks fell through in 2007 due to price disagreements. In the second round, a private equity unit of Morgan Stanley (MS.N) chosen as the preferred bidder pulled out of the process last August, with Ripplewood selected as the runner-up.
Daewoo has drawn little interest among Korean firms as it competes with low-priced Chinese producers and bigger domestic brands Samsung Electronics (005930.KS) and LG Electronics (066570.KS).
"The talks were discontinued late last month," said the official at a leading creditor bank, who declined to be named. "We will look for ways to normalize Daewoo through restructuring."
Unlisted Daewoo was placed under a debt rescheduling program after its parent group went bankrupt in 1999. Under creditors' management it has focused on TVs, air conditioners and refrigerators.
(Reporting by Rhee So-eui; Editing by Keiron Henderson)
