GM ahead in race to buy Daewoo assets

General Motors may emerge the dark horse in the race to acquire the assets of Daewoo Motors India.

According to institutional sources, teams from the General Motors' Asia-Pacific headquarters in Singapore have conducted informal due diligence at Daewoo Motors India's Surajpur plant over the past month.

A four-member global team from Ford, too, visited Surajpur. However, neither company has put in an official "expression of interest" to take over the Daewoo assets, valued at around Rs 3,000 crore (Rs 30 billion).

An institutional team visited General Motors' Singapore office recently and discussed a possible sale.

The sources said both General Motors and Ford had asked for a list of Daewoo's inventory. They added that while Toyota had also initially shown interest in Daewoo's Indian assets, it had not followed it up.

Sundaram Clayton, Hero Honda, Mahindra & Mahindra, Ashok Leyland and Jayprakash Ind want to buy pieces of the Daewoo unit. According to the sources, the power plant, the aluminium die-cast unit and the gearbox plant have drawn the most interest.

Even General Motors India appears to have been kept out of the loop. When contacted, P Balendran, vice-president (corporate affairs), General Motors India, denied any renewed interest in Daewoo's assets.

General Motors had decided against the acquisition of the Indian assets when it acquired Daewoo Motors Corporation, South Korea, last year. Ford, which was also looking to acquire Daewoo's global operations, opted out as well.

The global majors have renewed their interest as the assets come up for auction to repay Rs 1,200 crore (Rs 12 billion) owed to lenders, including Industrial Development Bank of India (around Rs 500 crore), ICICI Bank (Rs 400 crore), Exim Bank (Rs 142 crore) and other Indian banks (Rs 100 crore).

Recently, an auction of the company's fixed assets in Mumbai fell through after lenders moved court with a plan to sell the plant for a higher price.

However, the sources pointed out the acquisition of Daewoo's assets could be a long process. They said it could take another 30-45 days for the companies to complete their due diligence.

"General Motors took around two years to complete the process of acquiring Daewoo (Korea). Any acquisition of this nature takes a lot of time," they said.

"This is a fairly large asset we have put on the block. We are looking at value maximisation," institutional sources added.