South Korea’s Daewoo Electronics Co has announced it will sell the bulk of its assets to US investment fund Walid Alomar & Associates for $3.2bn. Daewoo Electronics president Yang Jae-yeol said the sale, which is expected to close by September 9, will include the company’s operations in Korea, the US, Latin America, Western Europe, Japan and Australia, but will exclude its manufacturing and sales operations in emerging markets such as China, Vietnam, Myanmar, India, Brazil, Eastern Europe, the Middle East and Africa. He said the remaining parts of the company have annual sales of about a trillion won ($830m), or 20% of Daewoo Electronics’ total revenue.
Walid Alomar has established a holding company called New Daewoo Electronics Company and this new firm will be acquiring all Daewoo Electronics’ operations in Korea and in advanced regions,” Yang told a press conference in Seoul on returning from a trip to the US during which he competed negotiations. He said that New DEC will take over all employees and will be allowed to continue using the Daewoo Electronics trademark. As for existing shareholders, they will have new business opportunities since New DEC is believed to be looking to list Daewoo Electronics in the US when the conditions are right, he said, we are basically looking at a situation where huge foreign equity is being injected with at least part of the Daewoo Electronics operation remaining intact.”
Daewoo Electronics is the consumer electronics unit of ailing Daewoo Group, which is working with its domestic creditors to reach final agreement on a sweeping restructuring plan. The conglomerate’s debts total around 57 trillion won ($47.4bn). Daewoo Electronics was to have been swapped with the Samsung Group for its motors operations but the deal fell through when Samsung Motors was put into liquidation. The Group’s IT and telecoms operations fall under a separate company, Daewoo Telecom, which is also in the throes of massive restructuring.
Walid Alomar & Associates is an investment group based in Beverly Hills, California. Walid Alomar is reported to be the son of a former Saudi minister and to have participated in a $5bn power plant project in Saudi Arabia. The company is involved in the internet business in the US, and has investments in telecommunications in China.
