Analysts said the two looked close to concluding a deal, but the price Ford would pay would likely be 15 per cent to 30 per cent lower than its initial offer of 7.7 trillion won ($6.9 billion).

"Negotiations with Ford are well on track," Jang Sae-chan, a spokesman for the Corporate Restructuring Coordination Committee (CRCC) for Daewoo companies, which represents the insolvent group's creditors, said on Thursday.

"Given the pace of progress, the sale of Daewoo Motor will be completed by the end of September."

Ford spokeswoman Meera Kumar said discussions with the committee started this week after the US automaker spent the past six weeks conducting due diligence on Korea's second largest carmaker in output terms.

Ford's Kumar declined to give further details, citing a confidentiality agreement.

"The negotiations have focused on details from the beginning, not fundamentals," said Shinyoung Securities auto analyst Cho Yong-joon. "The price will be between 5.5 trillion won, which the second-highest bidder General Motors (GM) is believed to have offered, and 7.7 trillion won."

Ford offered 7.7 trillion won ($6.9 billion) for Daewoo Motor and its affiliates, including the passenger car division of sister company, Ssangyong Motor

A price in that range would make both parties winners if the ailing automaker is sold as early as September, analysts said.

"Daewoo should start new life as soon as possible to escape its current mess," said Ji Sung-chun, a freelancer auto analyst. "Ford stands to gain immediate access in emerging markets such as Poland and those in Asia through Daewoo Motor."

If Ford succeeds in buying Daewoo Motor, with an annual capacity of 2.1 million vehicles, the automaker would approach the level of GM, the world's top-ranked automaker.

In late June, Daewoo's CRCC selected Ford as the sole bidder to open negotiations to buy Daewoo Motor.

The automaker's creditors had stepped in almost a year earlier with emergency funds when the automaker and 11 other Daewoo Group firms were on the brink of bankruptcy.

Ford's bid beat out GM teamed up with Italy's Fiat SpA as well as a joint bid from DaimlerChrysler AG and South Korea's Hyundai MotorA spokesman for Daewoo Motor said the final price was unlikely to fall much from the initial offer as financial data provided by the auction office was accurate.

"Ford may try to cut the price," said Daewoo Motor spokesman Lee Chang-won.

"But it should have good reasons to do so. I do not think they do, because our data will be similar to the results its own due diligence."

Local media reported last week the U.S. Auto firm had found an unexpected number of bad assets at Daewoo's overseas operations which could cause disputes over the sale price.

Officials at the CRCC and Daewoo Motor denied the reports and Ford's Kumar reclined to comment.Ford is expected to submit a final, binding proposal with a deposit by early Sept.Daewoo Motor sold about 945,000 vehicles last year,including almost 340,000 in South Korea, and is regarded as a strong competitor in the small car market at home as well as in Southeast Asia and Eastern Europe.

A due diligence by creditors published in January showed unlisted Daewoo Motor had 17.9 trillion won in liabilities and 11.8 trillion won in assets.

The auction office plans to sell the assets of Daewoo Motor and related firms to Ford, meaning the US automaker will not shoulder those debts.

(Reuters)