Ford starts due diligence of Daewoo

Ford Motor, chosen as the priority negotiator in the sale of Daewoo Motor, began its second due diligence into the ailing Korean automaker Monday.

The inspection will be conducted for six weeks until August 16 by a large scale team from the U.S. motor company which arrived in Seoul over the weekend. The inspection team is made up of about 200 persons, more than double the 100 who carried out the first due diligence, according to business sources. Headed by David Snyder, leader of the Ford¡¯s bid for Daewoo, the team will conduct the due diligence into Daewoo Motor, Ssangyong Motor and Daewoo Motor Sale simultaneously. The inspection into about 10 Daewoo¡¯s overseas plants will be made separately. The due diligence this time will focus on not only financial status such as assets and debts, but on plants facilities based on the secured data on factory operations and materials. Interviews of related persons will also be conducted. A Daewoo official said, "The second due diligence is aimed at confirming if the initial bid of 7.7 trillion won ($6.9 billion) was reasonable through on-the-spot inspection on the basis of the first inspection result.¡± The Corporate Restructuring Committee of Daewoo Companies said it will begin negotiations with Ford on the purchasing price as soon as the second due diligence is finished and plans to conclude the sale of Daewoo Motor by the end of August.

Hong Suk-Min smhong@donga.com