Four companies join bid for Dongbu Daewoo Electronics

Four companies have joined a bid to acquire Dongbu Daewoo Electronics, sources with knowledge of the deal said Wednesday.

The four companies include Dayou Winia, a small Korean electronics manufacturer; Sae-A Trading, a Korean textile exporter; Entekhab, Iran’s largest producer of electronics; and Midea, a Chinese home appliances maker.

Iran’s Entekhab formed a consortium with the Korean private equity fund Whale Investment to participate in the bid, which closed on Tuesday.

Daewoo Electronics, best known for its small wall-mounted washing machines, went bankrupt in 1999 after the Asian financial crisis and was owned by a group of creditors until Dongbu Group acquired it in 2013 for 272.6 billion won ($253 million).

To carry out the deal, Dongbu Group borrowed 130 billion won from investors and agreed that if the electronics company failed to achieve net assets of 180 billion won by 2016 - and list on the Korean stock market by 2018 - the investors and Dongbu Group would sell their stake in the company.

The sale price is estimated at 200 billion won.

By Seo Ji-eun