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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (5466)	8/4/1999 10:25:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

Daewoo to pump in $100m more in its local venture daewoomtrs.com daewoomtrs.com dynamicautos.com Sanjeev Sharma NEW DELHI 4 AUGUST EVEN as the Daewoo group faces turbulence in Korea, it is increasing its exposure in the Indian car company, Daewoo Motors India, and pumping in additional equity to the tune of $100 m. With this capital infusion, Daewoo's stake in the Indian arm will go up from 92 per cent to 96 per cent. When contacted, S G Awasthi, managing director, Daewoo Motors said, ''Daewoo is pumping in fresh equity as per our business plan as a necessary step to facilitate infusion of capital as and when required to improve the financial status of the company. It only speaks of Daewoo's commitment towards Indian operations which stands to grow further.'' According to sources, at a time when Daewoo is mired in serious financial trouble its decision to increase exposure in the Indian venture is being seen a bold move. The fresh equity infusion may be utilised for reducing debt in the company and for launching new models in the market. Earlier, there had been rumours that Daewoo is willing to reduce its stake in the venture. The global restructuring of the Daewoo group and realignment of businesses is also having a direct impact on Indian operations with the transfer of its 91 per cent holding in Daewoo Motors India. The 91 per cent holding of the Korean conglomerate in the car venture which was held by the holding company, Daewoo Corp, Korea, is now being transferred to another group company, Daewoo Motor Corp, Korea. This move follows the global reorganisation of the Daewoo group and the concentration of the auto business under one entity, Daewoo Motor Corp. This exercise has already been initiated in Korea and other joint ventures across the globe also will come under this framework. Most of these holdings were earlier centred in Daewoo Corp. With the concentration of the auto business under Daewoo Motor, it plans to become a major global player and manufacture 2.7 m cars by the year 2000. The Daewoo group has had plans to invest over $2.5 bn in India in all sectors that include automobile, power and electronics. The conglomerate has already pumped in close to $1 bn into its auto project alone making it one of the largest investors in this sector. While $1 bn has been earmarked for power projects in the country, over $400 m is likely to be spent in the area of electronics. Daewoo has considered India as one of the three major sourcing points in the world and expansion of operations here had always been in the company's focus. Even for its latest entrant, Matiz, Daewoo has major export plans for Korean and European markets. During the current fiscal, Daewoo hopes to sell about 30,000 Matiz cars in the domestic market and export another 30,000. (Daewoo car sales jump three-fold in May - ET Online, June 02, 1999)