The Hindu Business Line : Daewoo plant takeover: Nod for Crosslinks

New Delhi, Nov. 7 In what could be seen as the best Diwali gift for the 1,300 workers of the former Daewoo Motors India Ltd, the Debt Recovery Tribunal on Wednesday officially cleared the way for Crosslinks Finlease, promoted by the former Hyundai President, Mr BVR Subbu, SpiceJet’s Mr Ajay Singh, and India Online Network Ltd’s Mr Ashish Deora, to take over the assets of the facility and restart the erstwhile Daewoo plant in Uttar Pradesh.

The facility, lying idle since its shutdown in 2003, is to be refurbished and operationalised, with Crosslinks’ affiliate Pan India Motors to co-opt workers of the Daewoo Employees’ Union, who have been fighting a battle for survival for almost five years.

International interest

“The idea is to rejuvenate the plant and bring it in line of its capacity and capabilities. It has the most modern transmission and press shops. We will start with these areas and optimise its potential by and by. The process, however, will take some time,” said Mr Subbu.

He admitted to there being a large amount of international interest in the plant “with several OEMs having expressed a desire for wide ranging tie-ups for car engines and transmissions”. The plant has a capacity to manufacture 400,000 units of engines and transmission systems annually and used to produce the Matiz compact and Cielo and Nexia sedans.

Daewoo Motors India Ltd went into liquidation in 2003. To recover its assets, the DRT, Mumbai, first conducted auctions the same year but failed to receive a response. General Motors, which at one time considered buying the plant, too opted out.

After the banks and Customs, both of whom benefit from the proceeds, worked out a sharing formula, the fourth auction brought in Crosslinks in December 2006.

Though Crosslinks Finlease won the bid at Rs 765 crore, and had paid the initial deposit of Rs 76.50-crore deposit, the revival plans hit a road block with other interested parties entering the fray though they had not taken part in the auction process. However, Crosslinks was the only player that had officially committed to revival of automotive manufacturing and redeployment of workers. “There are tremendous skill sets available at the plant and we intend to co-opt all the productive skills,” said Mr Subbu.