GM to unveil plan to suppport Korean car unit

SEOUL, Oct. 15 (Yonhap) -- The head of General Motors Corp. plans to hold a press conference on Thursday to reveal plans to support its troubled Korean unit GM Daewoo after the U.S. carmaker and Korea Development Bank (KDB) reconfirmed their differences the previous day, GM Daewoo officials said.

Since February, cash-strapped GM Daewoo Auto & Technology Co. 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.
GM Chief Executive Officer Fritz Henderson visited the headquarters of KDB on
Wednesday to listen to opinions from officials there.
"There was a constructive dialogue. Additional details will be discussed later
between working-level officials," the KDB said in a statement.
The visit came as Min Euoo-sung, chairman of KDB, warned on Oct. 6 that the bank
will retrieve maturing loans from GM Daewoo if the U.S. carmaker refuses the
bank's demands to extend emergency funds.
"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 said.
KDB, which owns a 27.97 percent 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 percent 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.
sooyeon@yna.co.kr
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