May 30, 2011 / 10:17 AM / 8 years ago

UPDATE 2-Daewoo Electronics sale collapses, Electrolux eyed

* Daewoo Electronics shareholders turn to Electrolux

* $513 mln deal fails amid funding dispute, discount request (Add Electrolux comment)

By Ju-min Park

SEOUL, May 30 (Reuters) - A $513 million takeover of South Korea’s Daewoo Electronics Co Ltd [DEWOO.UL] has collapsed, leaving its creditors-turned-shareholders to tap reserve bidder Swedish electronics firm Electrolux AB (ELUXb.ST).

Officials from major shareholders Korea Asset Management Corp [KASST.UL] and Woori Bank told Reuters they had decided to drop the deal to sell the unlisted electronics maker to Iran’s Entekhab Industrial Group.

A source who declined to be named said Entekhab made a request to cut the price by about 60 billion won ($55.4 million), but the request was not accepted.

The move is the latest setback to the sale process, which creditors had hoped to wrap up after a series of failures.

The unlisted Iranian appliance maker was named preferred bidder for Daewoo last year, beating rival 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.

Electrolux spokesman Erik Zsiga said the group would not comment on the issue until there was official confirmation that the deal with Entekhab had fallen through, but repeated that the Swedish company remained open to talks if approached.

He said he was not aware if the company had already been approached regarding Daewoo.

It was the fourth attempt by creditors to sell Daewoo, which primarily makes washing machines and refrigerators. [ID:nTOE69J051] ($1 = 1082.400 Korean Won) (Reporting by Ju-min Park; Additional reporting by Niklas Pollard in Stockholm; Editing by Chris Lewis and Will Waterman)

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