The prolonged closure of Daewoo Motors India's plant at Surajpur, coupled with inordinate delay in selling the assets, appears to be taking a toll on the Rs 3000-crore (Rs 30 billion) worth assets of the beleaguered Daewoo Motors India.
Bidders who visited Daewoo's premises recently to inspect the plant and machinery say the condition of the plant is deteriorating steadily.
A few bidders, who were present at the auction of Daewoo's assets in Mumbai recently, even said that a number of parts were missing from its current assets (vehicles, spares).
Sources at a Mumbai-based auto company, which is interested in parts of Daewoo's assets, said: "The asset quality is deteriorating as the plant has been out of operation for some time. Any more delay will further affect the machinery."
A senior executive at another auto manufacturing company said: "While the plant is exceptionally good, there is no power at present, so one could not see the machines in operation. Both the service history of machines and the records of stores and spares are currently not available. In their absence, we cannot put a value to the machines we are interested in."
What's worse, even the bankers are not optimistic about finalising a deal for Daewoo's assets any time soon.
Sources in the lenders' consortium said recently that any deal could still be months away, as the amount involved is quite substantial.
Daewoo's auction has failed to consummate twice so far. While the first time, it was adjourned to take stock of the company's current inventory, in the second instance, the bids for its current assets were substantially lower than expected, and hence, were rejected.
With surplus capacities in the domestic industry, many companies are interested in certain machines from Daewoo's plant, which could be used to economically debottleneck their own production capacities.
General Motors, Ford, Tata Engineering, Ashok Leyland, Mahindra & Mahindra, Sundaram Clayton and Ricoh Auto are some of the companies that have evinced interest in Daewoo's assets.
