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Daewoo Starts Selling Itself Off

CVC Asia Pacific Ltd. has confirmed that it plans to lead a consortium designed to acquire the networking, switching and fiber optic cable businesses of Korea’s Daewoo Telecom Ltd.

CVC Capital Partners Asia Pacific Ltd., The Carlyle Group, PPM Ventures and Asia Investors LLC are also participating in the buyout deal.

Although rumors of the transaction began circulating last week, Citigroup, parent of CVC Asia Pacific and Asia Investors, does not plan to make a formal announcement until later this week.

The new entity, one of the first spin-offs of long-troubled Daewoo Group, will be incorporated in Korea as Mercury Corp.

Although the terms of the deal will not be disclosed, CVC Asia Pacific said acquisition financing has been raised via a syndicated term loan jointly underwritten by Chase Manhattan Asia, Hana Bank and Kookmin Bank. The lenders will also provide working capital to the company.

Mercury Corp. will acquire all of Daewoo Telecom’s existing management and employees. Jin-chan Kim is slated to become chief executive of the new company.