TEHRAN (AFP) – Iran’s Entekhab Industrial Group has signed a contract sealing its acquisition of South Korea’s Daewoo Electronics for 518 million dollars, reports and officials said on Sunday.
The buyout by the privately owned Iranian company comes about two months after Seoul’s government imposed unilateral sanctions against the Islamic republic over its sensitive nuclear drive.
Entekhab, which along with Swedish giant Electrolux has been pursuing the South Korean company for the past year, had “purchased Daewoo Electronics for 518 million dollars,” said a report in the reformist Shargh newspaper.
A diplomat who spoke to AFP on condition of anonymity confirmed the “final contract was signed a few days ago and the acquisition of Daewoo Electronics by Entekhab is complete.”
Reports in South Korea said Daewoo Electornics’ creditors had signed an agreement on Monday to sell a controlling stake to Entekhab for 577.7 billion won (about 511 million dollars).
They said creditor banks, led by state-run Korea Asset Management Corp., had a combined 97.5-percent stake in the company.
Daewoo Electronics, a former subsidiary of the now-defunct Daewoo Group, has been under a debt rescheduling programme since 1999 when its parent company collapsed.
Daewoo was set up in the 1960s and became one of the biggest companies in the world before it disintegrated in financial disarray in the 1990s. Its shipbuilding and auto units are now independent companies in their own right.
Entekhab is located in the central province of Isfahan and produces home appliances like refrigerators, washing machines and televisions under the brand names of Snowa and Haier.
Its acquisition of Daewoo Electronics comes after Seoul, reportedly under pressure from the United States, levied its own sanctions against the Islamic republic on September 8 over its nuclear programme.
As part of these unilateral punitive measures, South Korea has suspended the operations of Iran’s Bank Mellat from October 11 for alleged violation of foreign exchange laws.
Bank Mellat is one of Iran’s biggest lenders and its Seoul branch is its only operation outside the Middle East and Europe.
Iran says its nuclear programme is aimed at the peaceful generation of electricity.
But the United Nations, the European Union, the United States, and several other countries such as South Korea have gone ahead and imposed sanctions against Iran.
South Korea has also put restrictions on new investment in Iran’s oil and gas industry, but no Iranian ban on oil imports which provide 10 percent of South Korea’s needs.
South Korea has also reduced export guarantees for shipments to Iran. Trade between the two countries was worth 9.74 billion dollars last year.