U.S. auto giant to buy Daewoo plants for US$782m: Report
U.S. auto giant to buy Daewoo plants for US$782m: Report
SEOUL (Reuters): U.S. auto giant General Motors (GM) is ready
to pay nearly US$782 million to buy two plants from South Korea's
bankrupt Daewoo Motors, the Korea Economic Daily reported on
Wednesday, citing no sources.
GM and Daewoo's main creditor, state-run Korea Development
Bank (KDB), declined to comment on the report.
"Due to the ongoing status of talks with the Korean side, it
would be inappropriate to comment on specific issues," GM
spokesman Rob Leggat said.
"Talks are still progressing," a KDB spokesman said,
reiterating comments on Tuesday by Finance Minister Jin Nyum.
"That is all we can say at this point."
A senior Finance Ministry official told Reuters last week GM
had made a final offer for Daewoo that excluded its largest and
most antiquated plant of Pupyong, which employs almost half the
Korean firm's workforce and is highly sensitive politically.
Shares of Daewoo Motor Sales, which trade as a proxy for the
unlisted automaker, were up 2.42 percent at 3,510 won (US$2.74)
by 0107 GMT, while the broader Korea Composite Stock Price Index
was down 1.27 percent at 551.71.
"There are no disagreements when it comes to GM acquiring the
Kunsan and Changwon plants," the newspaper said. "It was learned
that the price tag is slightly less than one trillion won," the
newspaper reported. This figure represents about $781.8 million.
"GM has made a new request for the government to guarantee as
much as $400 million in Daewoo Motor's debt," it added.
Daewoo's Kunsan plant in southwest Korea, built in 1986, is
its newest, with an annual output capacity of 320,000 units. It
makes the Nubira car, Tacoma minivan and heavy trucks.
Changwon in the southeast makes the sub-compact Matiz
passenger car and two more compact commercial vehicles, and has
an annual output capacity of 280,000 units, Daewoo said.
GM and partner Fiat of Italy made a proposal in May to buy
Daewoo, but have said little since about its progress.