Financial investors of Dongbu Daewoo Electronics are moving to sell 100 percent of their stakes in the appliance maker, which is raising questions about the future of the company, market watchers said Sunday.

Sources said that Korea Securities Finance Corp., KTB Private Equity and other FIs took steps last month aimed at selling the home electronics company.

Investors control 45.8 percent of the company's stakes, while Dongbu Group holds the remaining 54.2 percent, but under a previous pact, FIs can exercise the right to sell all or part of the shares owned by the majority shareholder.

Investors had injected 135.6 billion won ($121.2 million) into cash-strapped Dongbu Daewoo in 2013 and secured the "drag along" right if the company did not meet management targets that protected and advanced their rights. This includes carrying out an initial public offering and maintaining net assets above a set level.

"In effect Dongbu Daewoo Electronics failed to meet requirements allowing investors to exercise drag along rights," a source said. He said that if the sale takes place Dongbu Group would effectively lose the company.

"Dongbu tried to find a Chinese company to buy the FIs shares, but negotiations fell through," electronics business insider said, without providing details.

A Dongbu Daewoo executive, on the other hand, stressed that while talks to sell shares did not go as planned, negotiations are still underway with the prospective buyer.

"A little more time is needed and the market should be patient," he said. (Yonhap)