KDB THREATENS TO WITHDRAW LOANS FROM S. KOREAN CO GM DAEWOO
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GMCEQ | Quote | Chart | News | PowerRating -- The Korea Development Bank (KDB)
will retrieve maturing loans from the South Korean unit of
General Motors Corp. if the U.S. carmaker refuses the bank's
demand to extend emergency funds, KDB's chief warned Tuesday.
Since February, cash-strapped GM Daewoo Auto & Technology
Co. (KSE:005380), has been in talks with KDB to receive about 1
trillion won (US$855.8 million) in new loans after using up a
$2 billion credit line. The negotiations have faltered on GM's
refusal to put up part of its stake in GM Daewoo as
collateral.
"If GM does not accept our demand, KDB will not participate
in a new share sale and plans to retrieve maturing currency
forwards or loans," Min Euoo-sung, chairman of KDB, told
reporters.
KDB, which owns a 27.97 per cent stake in GM Daewoo, has
called on GM to faithfully fulfill its commitment as the
biggest shareholder. The state-run lender has called for GM to
increase the size of the share offering and to let GM Daewoo
retain licenses for cars developed by its Korean subsidiary.
GM Daewoo said in September that it will raise 491.2 billion
won in the share sale this month to secure working capital, but
KDB saw the amount as insufficient for GM Daewoo to achieve a
turn around.
GM holds a 51 per cent stake in GM Daewoo with KDB and other
GM partners owning the remainder. GM Daewoo was created in 2002
after GM acquired Daewoo Motor Co., the automobile
manufacturing unit of the now-defunct Daewoo Group.
(Yonhap)lm
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