Daewoo Motor India’s assets sold for Rs. 765 crores

Crosslinks Finelease, a company promoted by Hyundai’s ex-president BVR Subbu and SpiceJet promoter Ajay Singh, along with the backing of a number of private equity firms, have bought out Daewoo Motor India’s Surajpur assets for Rs. 765 crores. A payment of Rs. 300 crores will be made immediately and the balance Rs. 465 crores will be paid on a staggered basis through monies raised through convertible debentures and debt.

The Crosslinks bid was earlier contested by some of the other bidders such as JBM Auto and Adzons Media and was accordingly referred to the Debt Recovery Tribunal (DRT). However, The DRT has upheld ARCIL’s award of the bid by Crosslinks, thus ruling in the latter’s favour. Crosslinks will pump in an additional Rs. 300 crores to upgrade the plant, which will be completed in six months and the plant will become operational soon after.

The Crosslinks’ business plan is to turn the Surajpur plant into a neutral product platform for large scale auto component play. Crosslinks intends to use the plant to make engines, transmissions and pressed components on lease manufacturing basis for domestic as well as overseas markets.

Asset reconstruction company ARCIL, which had acquired Daewoo Motor India’s debt from banks, had recommended Crosslinks’ bid to the DRT. The Crosslinks’ bid is the highest that the asset has ever attracted. There were two rounds of auction for the Surajpur plant earlier, which did not work out because of the very high floor prices of Rs. 2000 crores and 1000 crores, respectively. This time around, the bids ranged from Rs. 400 crores to Rs. 700 crores and the names in the fray included the likes of Suryamoney Finance and Moksh Infotech. One of the major attractions of the asset is the 200 acre-land, though ARCIL has been clear it wants the plant to be used for manufacturing.

Read The Economic Times article.