SOME of the bidders for Daewoo Motorsâ€™ have moved the court, objecting
to a part-cash, part-securities deal offered by one of the parties to
buyout the assets of the troubled firm.
The development takes place just a few days before the court is expected to announce the final bidder.
The bid that is being challenged at the Debt Recovery Tribunal, has been made by Crosslinks Ltd, Crosslinks is jointly promoted by B V R Subbu who had set up Hyundai units in India, and Ajay Singh promoter of the Spicejet Airlines. The bid is a combination of cash, debt and equity for a total consideration of Rs 700 crore.
Arcil, the asset reconstruction company which deals in stress assets, and has acquired majority of Daewooâ€™s debt from banks, has recommended Crosslinks Finelease Pvt to the Debt Recovery Tribunal (DRT).
However other bidders like JBM Auto and Adzons Media have objected to Crosslinkâ€™s proposal. When contacted, CEO and managing director of Arcil, S Khasnobis declined to comment, stating that the matter is subjudice.
The Debt Recovery Tribunal, Mumbai, is scheduled to take a decision on the final bidder on February 8.
Adzons, which has made a Rs 600 crore bid, has claimed that equity cannot be included as a consideration in deciding the value of the plant. However, lenders claim that most restructuring packages involve conversion of debt into equity. JBM Auto, on the other hand, has claimed that it has offered a better deal: even though a part of it is equity, it is willing to share with the lenders an upside on the stock up to 18%. However, JBM is guaranteeing any assured return to the lenders.
Arcilâ€™s contention is that Crosslinks will guarantee a return of 10% and also share the entire upside with the lenders. The Rs 700 crore Crosslinks offer includes 30% equity, 35% as cash and the balance as debt.
Sources said the bidders are eyeing the 200 acre land located at Surajpur at Uttar Pradesh, which would be auctioned with the car plant. For over three years, efforts are being made to sale the Daewoo plant but eventually bigger names like General Motors backed out due to perennial dispute between the lenders and the customs authority.
In this round of auction, DRT saw five bids ranging from Rs 400 crore to Rs 700 crore. However none of the bids were from automakers. Other bidders include Suryamoney Finance, owned by Pawan Kumar and Moksh Infotech, a largely unknown company.
The South Korean-based Daewoo Motors ran into financial trouble after the Southeast Asian monetary crisis. The company was forced to sell its assets the world over to meet debt obligations. In India too the process to auction the Daewoo property began way back in â€˜02.
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