Reuters reports today that Entekhab Industrial Group has threatened to take legal action to stop the sale of unlisted Daewoo Electronics Co Ltd after the main shareholders of Daewoo decided to drop the an earlier deal with the Iranian group over funding uncertainties.
As we reported on Tuesday the collapse of the sale led to widespread speculation that former bidder for Dawoo, Electrolux, would step in and snap up the Korean manufacturer as had been expected previously before Entekhab threw it’s hat in the ring.
As the report in Reuters quite rightly points out, this move is just the latest twist in the prolonged sale process, which creditors-turned-shareholders had hoped to wrap up after a series of earlier failures.
The unlisted Iranian group was picked as preferred bidder for Daewoo last year, beating Electrolux, but it has repeatedly failed to satisfy creditor demands for a detailed funding plan, resulting in several months of delays to the final agreement. Quite why Entekhab was picked as the preferred bidder remains a bit of a mystery as Electrolux would seem the far more logical choice, apart from the little fact that we know Electrolux has the money to spend on the acquisition and then some. It seems strange to pick an unlisted Iranian company that has no presence outside of the Middle East.
Reuters also reports that, “Entekhab Group, the biggest business partner with Daewoo Electronics, will review its decision on the continuation of its cooperation with Daewoo and preserve its right to completely halt its business activities with Daewoo if the company fails to offer a way out of this crisis,” Entekhab said in a statement carried by Iran’s Students News Agency. “We warn the company that the nullification of the contract is illegal and we will follow up the case through the court to stop any deal on the company, if Daewoo fails to offer a solution for this problem.”
Daewoo said revenue generated from Entekhab accounted for less than 5 percent of total sales last year, but offered no further comment. We’d be more than a little surprised in Daewoo or, anyone else really, was all that bothered about the sabre rattling.
