SEOUL - Creditors of Kia Motors Corp. last week were deciding what new terms they would offer for a second auction of the bankrupt carmaker. The banks are resisting pressure to write off part of Kia's debts, but the failure of the first attempt to sell Kia showed that bidders will not accept the original terms.
Ford, Daewoo, Hyundai and Samsung all bid for Kia in the first auction, but none would accept its $9.6 billion debt against booked assets of $5.7 billion.
'The prospects for success (in the second round) are not great if the initial arrangements are maintained,' admitted Jung Sang-Jin, a Kia spokesman.
Revised terms were to be communicated to qualified bidders on Friday, 11 September, and new bids are due by 21 September. The successful bidder will be announced 28 September.
'The purchase price isn't all that important. It's the concessions on the debt side. They are the key, the absolute determining criteria, so there's no way to predict the outcome,' said Dell Ricks, Seoul-based head of research for ABN AMRO Asia.
The most aggressive bidder the first time was Samsung. Its per-share bid was $4.58 for Kia and $4.28 for Asia Motors, its truck subsidiary. The banks had insisted on at least $3.75 a share for each. Daewoo bid $3.90 for each. Ford offered $3.75 for Kia but only 75 cents for Asia. Hyundai bid $0.075 for Kia and $0.0075 for Asia.