M&M in talks with Daewoo India for engine unit: BSE

Monday, 08 March 2004, 20:30 IST
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MUMBAI: Indian automobile and tractor maker Mahindra & Mahindra is in preliminary talks to buy the engine and transmission unit of Daewoo Motors India Ltd, the Bombay Stock Exchange said on Monday. If concluded, the deal would mark a successful sale of all the main Indian assets of South Korea's bankrupt Daewoo, whose Indian arm currently has a total equity value of more than $100 million. Just last week, General Motors Corp, the world's biggest automaker, said it had offered to buy Daewoo's closed Indian car assembly plant for an undisclosed amount. A court receiver has been trying to sell all the assets in parts to repay creditors, after an offer to dispose of Daewoo India as a stand-alone business attracted no bids. About 18 banks, led by ICICI Bank and Industrial Development Bank of India, had lent over $331 million to the carmaker. There is already great interest in India's car market, which is growing at a torrid pace as the middle-class expands in line with the economy. Multinational car firms are also big buyers of Indian car parts, one of the country's most successful industries. Shares in Daewoo Motors India, in which the South Korean parent owned more than 90 per cent, were unchanged at Rs 9.95 in late morning trade in Bombay, valuing its equity at around $112 million. Daewoo India reported a Rs 1.16 billion loss on revenue of Rs 13.08 billion in 1999-00, its last normal year before its parent's bankruptcy.
Source: IANS