SEOUL (Reuters) – U.S. private equity firm Ripplewood Holdings was picked on Wednesday as the favored bidder to buy South Korea’s Daewoo Electronics, after two failed attempts to sell the loss-making appliance and TV maker.
Ripplewood beat a consortium of Digilant Systems and Russian investors in the race for Daewoo, formerly part of the failed Daewoo Group and now owned by creditors, according to leading creditor Woori Bank.
Details such as a bid price have not been disclosed.
A consortium of India’s Videocon Industries (VEDI.BO: Quote, Profile, Research, Stock Buzz) and RHJ International (RHJI.BR: Quote, Profile, Research, Stock Buzz), the holding company for Ripplewood, was initially picked as a buyer but the talks fell through last year due to price disagreements. In the second round, a private equity unit of Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) chosen as the preferred bidder pulled out of the process in 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: Quote, Profile, Research, Stock Buzz) and LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz).
Woori said in a statement it aimed to sign a final contract by the end of this year, following due diligence by Ripplewood.
Unlisted Daewoo was placed under a debt rescheduling program after its parent group went bankrupt in 1999. Since restructuring under creditors it has focused on TVs, air conditioners and refrigerators.
Daewoo Electronics posted a 128.7 billion won ($88.4 million) net loss in 2007 after the previous year’s loss of 183.5 billion won, according to its latest regulatory filing.