European electronics maker Grundig AG should come back to the negotiating table with Sampo Corp (
"If Grundig is smart enough, they will come back to talk to Sampo," Chinese-language media quoted Sampo's Ho Heng-chun (
Ho's invitation comes as yet another deal to save Grundig fell through. On Monday, a leading Turkish consumer electronics company, Beko Elektronik AS, dropped its plan to buy a majority stake in Grundig.
"The risks presented by the current economic climate played a major part in the investor's decision," Grundig said in a statement.
Sampo's January offer to pay nearly US$100 million to buy the 58-year-old Nuremberg-based brand name saved Grundig from bankruptcy when banks extended additional credit on the strength of the offer.
The deal, however, fell through in early March when banks in Europe refused to underwrite a loan of US$430 million for the purchase of the newly acquired company. Compounding the deal's conclusion was Sampo's refusal to pay US$218 million for Grundig's pension liabilities as well as an outstanding US$48 million loan for capital equipment, Financial Times Deutschland reported in March.
The sticking point for any negotiations appears to remain with creditor banks in Europe, Sampo's spokesperson said.
"In the final stages of our discussions we came to an agreement on the pension and capital expenditure liabilities, but there were still problems with the level of royalties expected from the German banks," Kanty Wu (
If Grundig can work out a deal with the banks, Sampo is ready to resume its buy-out plan, Wu said.
The latest failure to find an investor has sent Grundig scrambling to select a new front man. Accountant and insolvency lawyer Eberhard Braun joined the board of directors Tuesday as spokesman after chairman Hans-Peter Kohlhammer was booted off the board, the company said in a statement.
"Dr. Braun has many years of experience in similar corporate situations," the statement said. "This will be called on in the forthcoming structural reorganization."
The statement also claimed there were other possibilities for investment.
The new board of directors aims to hang on to "the technological core of the company and its important subsidiaries" to keep operating, the statement said. Grundig now appears to be preparing for a "self-governing insolvency," Financial Times Deutschland reported yesterday.
"I'm assuming that insolvency can no longer be avoided," Grundig board member Thomas Schwarz was quoted as saying yesterday.
Four creditor banks, including Deutsche Bank, Dresdner Bank, Bayerische Landesbank (Bavarian State Bank) and the Bavarian State Foundation for Structural Financing, are expected to terminate the line of credit, the report said.
Since Sampo's bid in January to purchase a controlling stake in Grunding, analysts have said that acquiring the trusted brand name will help Sampo expand its sales internationally.
"When entering a new market, branding and distribution are difficult barriers, especially in Europe, where consumer behavior is quite different from Asia," Chen Yen-liang (
The branding shortcut allows Sampo to enter not only Europe but also the global market, Chen said.
"Market expansion is important for Sampo's survival, since the domestic market is limited and competition continues to grow after Taiwan's WTO entry," Chen said.
Grundig's press contact Holm Kilbert was unavailable for comment "due to the stresses of the current situation," a source at the Nuremberg headquarters said yesterday.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS