After many attempts to salvage the ailing Korean car maker Daewoo Motors India Ltd (DMIL), the lenders have finally put the company for sale.The company had entered into India as an arm of former Korean auto giant Daewoo Motors Corporation through a joint venture in 1996 to manufacture a range of passenger cars and commercial vehicles. Following their inability to recover the loans amounting to Rs 1,000 crore, the three financial institutions ICICI, IDBI and Exim Bank took this decision recently.A Debt Recovery Tribunal (DRT) No III in Mumbai has invited bids from prospective buyers through a public notice issued on Friday to buy DMIL’s property and assets located in Surajpur, near New Delhi.However, the sale process is unexpected to generate much demand as most of the leading domestic automobile manufacturers have decided to stay away from the bidding process.Country’s top most automaker Maruti Udyog Ltd already has a capacity to produce five lakh cars per year hence buying such a huge property is not suitable to its profile. Other Korean automaker present in India, Hyundai is also staying away from the sale process by citing the reasons of enough capacity of 1.2 lakh units annually which is also under expansion to 1.5 lakh units annually.General Motors India with whom the lenders were reported to be in talks sometime back for the buyout of Daewoo, feels that ‘the question of participating in the bidding process does not arise again because it has enough capacity and Daewoo has huge debt. Telco, on the other hand refused to comment on this issue.According to industry experts the domestic car industry is already reeling under the pressure of over capacity and low demand growth. The passenger car sector has grown only by 7.65 per cent between April to October in this fiscal and this will certainly affect the sale process of Daewoo Motors.The DRT, has fixed December 18, 2002 as the last date for receipt of offers for sales of the automaker on ‘as is where is’ and ‘as it what is’ basis from interested public parties. The offers will be considered in a meeting of the parties on December 19.The plant will be kept open for inspection to the intending purchasers from December 2 to December 14, 2002. When contacted, the Daewoo Motor spokesman declined to comment. Among all lenders, ICICI has the highest exposure of about Rs 500 crore while IDBI and Exim Bank have lent about Rs 450 crore and Rs 100 crore respectively.ICICI had petitioned the DRT for appointment of a receiver to sell the plant either through a private deal or through public auction. Daewoo had invested about Rs 4,500 crore to set up operations which include its manufacturing plant in Surajpur (Uttar Pradesh) having a capacity to produce about one lakh cars annually. Production in the company is closed since August this year.
