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Daewoo Motors India assets to be auctioned to recover Rs 2,250 crore

Daewoo Motors India assets to be auctioned to recover Rs 2,250 crore

Mumbai/New Delhi, March 11, 2019 :  Assets of the former South Korean global automobiles giant, Daewoo Motors India Ltd., which were taken over in 2008 by a newly-formed Pan India Motors, would again to be sold at an auction on April 11 and DRT Mumbai aims to recover around Rs 2,250 crore from the auction.

Remarkably, the auction comes more than 15 years after the company shut its Indian operations in 2003-04.  According to a recent notification issued by the Debt Recovery Tribunal's (DRT) Mumbai, the online auction will be held in two lots. The Lot-1 of the e-auction would include the 204-acre of land at Greater Noida in Uttar Pradesh, which would also include the structures, furnitures and so on, for which the minimum reserve price has been set at Rs 528.61 crore.

Also the successful bidder would be required to clear out pending dues of the Uttar Pradesh State Industrial Corporation's dues, estimated to be around Rs 66.58 crore. In Lot-2, "all other properties on the same (204 acres) plot of land" would be put up for sale, with a minimum reserve price of Rs 83.01 crore.

People who have worked with Argentum Motors said that the auctions might be separately held for the land and the equipments installed.  Industry sources said Delhi-based auctioneer, C1 India has been assigned for the task. Despite repeated attempts, the company declined to comment on the developments and has not replied to an email questionnaire sent by IANS on the auction details.

This is not the first time that Daewoo Motors India's assets have gone up for sale. The previous auction process by DRT Mumbai started in 2006 concluding with a company named Pan India Motors taking over the assets.

The shareholders of Pan India Motors included FirstRand Bank, a South African banking major, D. E. Shaw, a global investment and technology development company, infrastructure lending major IL&FS (interestingly it is also cash strapped now), Ajay Singh, the co-founder and Chairman of SpiceJet and B.V.R. Subbu, the former President of Hyundai India. 

Ravinder Kumar told IANS that the new company took over the Indian assets of the bankrupt South Korean company for around Rs 765 crore under a condition that it would turnaround the company and continue with the automobile business.

Argentum Motors was the operating company while Pan India Motors was the holding company, said another former employee of that company. The promoters initially planned to manufacture automotive components and then gradually produce electric vehicles (EV). They also started as per the plan and made an EV model in tie-up with Reva and a French company.

Industry sources said that although the company had started with a primary target of manufacturing automobile and components, some of the promoters including IL&FS later reportedly wanted to use the company's property to earn revenue which eventually led to differences among the promoters.