Sampo Corp's (聲寶) proposed purchase of a controlling stake in German home-electronics giant Grundig AG may fall flat because of concerns about the latter's debt, a local newspaper reported yesterday, citing Sampo CEO Ho Heng-chun (何恆春).
The paper said the deal is about to fail because Sampo, Taiwan's largest consumer-electronics maker, was having difficulty underwriting a bank loan of around NT$1.5 billion for Grundig.
Sampo signed a deal on Jan. 8 to acquire majority control of the Nuremberg-based maker of TVs, stereos and car audio equipment. Sampo planned to pay less than 100 million euros (US$107 million) to buy a 75 percent stake in Grundig.
Under the terms of the contract, Sampo reportedly demanded cooperation by Grundig with finance, taxation, production cost and union cooperation prior to reaching a final agreement.
But Sampo seemed to consider the original contract unenforceable, the paper said.
Grundig last year reported nearly US$100 million in debt and came close to filing for bankruptcy when banks refused to extend credit until Sampo registered its interest.
Sampo has viewed the proposed deal as a giant leap forward in terms of branding, as it would gain access to Grundig's 29,000-outlet distribution network in Europe.
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