Seoul, Oct 4: South Korea's economic minister said on Wednesday they want to sell ailing Daewoo Motor, whose uncertain fate has undermined confidence in the country's restructuring efforts, by the end of October. `` South Korea will try to find a preferred bidder for negotiations and conclude a sale contract for Daewoo Motor during October,'' said a joint statement ahead of a meeting of top economic policymakers.But analysts and officials at Daewoo Motor's main creditor,Korea Development Bank (KDB), said the government's target to sell Daewoo Motor looked overly optimistic.
Creditors have been scrambling to find a new buyer for Daewoo since U.S. Auto giant Ford Motor Co. abruptly withdrew its $ 6.9 billion bid to buy Korea's second-largest carmaker in mid-September. ``It's absurd to set a deadline for negotiations like this,'' said a KDB official. "The target is only wishful thinking."
On Friday, KDB said it had scrapped a self-imposed deadline to sell the debted Korean carmaker by October 20, adding it would try to find a potential buyer for negotiations by then.
Analysts said the method of the Daewoo sale was still unclear after Ford Motor dropped out - whether Daewoo Motor's assets would be sold piecemeal or as a single package. ``Creditors naturally prefer a package sale,'' said SongSang-hoon, analyst at Dongwon Economic Research Institute. "But they may have to consider other options because potential buyers may not be ready for such a deal." General Motors Corp, the world's largest automaker, said it would consider bidding for all, or part of the Korean company as it sought access to Asia's second biggest car market and an export base for the rest of the continent.
But Daimler-Chrysler chief executive Juergen Schrempp said last week neither his company nor its South Korean partner, Hyundai Motors, was interested in acquiring Daewoo Motor. Daimler-Chrysler and Hyundai submitted a non-binding joint bid in June for the company as did GM and its partner Fiat SpA, but Ford was given exclusive negotiating rights after that auction.
The prospect of high oil prices battering the auto industry is chilling the enthusiasm to buy the Korean automaker with an annual capacity of more than two million units, they said.
Daewoo Motor was suffering from fund shortages despite 2.1 trillion ($1.9 billion) got from its creditors since the company and 11 other Daewoo affiliates were put under a debt rehabilitation programmes in August 1999.Ford had been expected to buy Daewoo Motor and related firms to back its foray into the fast-growing Asian auto market, but its withdrawal scuttled what would have been the biggest takeover of a Korean company by a foreign firm.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.