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.