Talks to sell the assets of Daewoo Motor India have gained momentum between the domestic lenders and international car majors, including General Motors and Ford Motors.
Negotiations between the two parties had reached a deadlock when the former refused to scale down the asking price for the facility.
Daewoo Motors India owes over Rs 1,000 crore (Rs 10 billion) to institutions, including ICICI Bank, Exim Bank, IDBI. Creditors took control of the facility through a receiver appointed by the debt recovery tribunal.
Industry observers have attributed the renewed interest in talks to the current boom in the auto industry.
"When the plant came up for sale the first time, the industry was in a recession but now things have changed. Though it is riddled with problems, debt, asset depletion and labour issues, the plant is exceptionally good," an industry source said.
The institutions, which had recently held a meeting with General Motors on the issue, are also in talks with some auto component manufacturers.
Earlier, a team from General Motors's Asia Pacific headquarters in Singapore had done an informal due-diligence of the plant.
General Motors has, however, denied any interest in Daewoo's assets.
"These are completely unfounded rumours, we are not looking at the Surajpur plant," said P Balendran, vice-president, corporate affairs, General Motors.
The Daewoo scrip today closed at Rs 9.13 up by 8.30 per cent at the Bombay Stock Exchange. The scrip has more than doubled in the last one week. It was at Rs 4.11 on November 4.
Sources added that a final resolution could, however, take some time. The institutions are looking at different combinations of selling the assets -- a direct sale of the plant or 'a lease cum sale option'.
Banks and institutions, which were earlier looking at dividing the company into six parts, are now looking at splitting the plant into three parts.
As per the earlier plan, the Daewoo facility was to be split into six units including assembly line and paint shop, press shop, engine and transmission plans and 40 MW captive power plant.
The plant will now be divided into assembly line and paint shop, engine plant and transmission plant. The power plant will be bundled into one of these units.
© 2025