GM to sign final deal to buy Daewoo

GM to sign final deal to buy Daewoo

Reuters, Seoul

The world's top-ranked carmaker General Motors Corp is expected to sign a final contract next week to take over core assets from South Korea's Daewoo Motor Co, Daewoo's top creditor said on Tuesday.

GM stands to gain a foothold in Asia's third largest economy, while Daewoo creditors will be able to unload some of the 16 auto plants that the 1999 collapse of Daewoo left them holding.

"We understand GM's chairman Jack Smith will come to Korea next week to conclude the deal," Yang Moon-seok, spokesman for Daewoo's main creditor Korea Development Bank, told Reuters.

A GM spokesman in Seoul confirmed by telephone the top GM executive was preparing his trip to Seoul to sign the purchase contract.

"His schedule has yet to be fixed," Kay Lee, spokesman for GM's Seoul office, said. "But we expect to see the signing of the final contract next week."

General Motors signed a tentative deal worth $400 million last September to buy four plants and more than 20 overseas sales units.

The final acquisition price would be basically the same as the September MOU, but GM was expected to dump a Daewoo plant in Egypt from its original plan to buy four plants and to scale back its takeover of sales units, a KDB executive said earlier.

Creditors would be left with 13 plants in Korea, Poland, Uzbekistan and elsewhere that analysts expected to be sold or used to supply components to the revived Daewoo.

State-run KDB has backed the GM sale since the U.S. auto giant submitted a letter of intent in October 2000.

Government-led reforms have included supporting asset sales to foreign buyers as a way of strengthening South Korea's auto, banking and other sectors.