GM proposes to convert US $2.2 bil. debt for equity, in exchange for financial support to stay in Korea
- 6 years ago
We begin this morning with the economic and political repercussions stemming from General Motors' decision to essentially pullout from Korea.
Sources with direct knowledge of the matter say GM has offered to convert around two-point-two billion U.S. dollars owed by its loss-making South Korean operations into equity,... in exchange for financial support and tax benefits from Seoul.
Nothing has been decided,... but the debt-equity swap would allow GM to continue its business operations in Korea.
Regardless of whether a deal is struck or not,... it seems the state-run Korea Development Bank, which holds a 17 percent stake in GM Korea, is going to be heavily criticized.
Watchers say KDB should have known about the automaker's financial predicament and sounded the alarm long before GM made its surprise announcement.
Following a meeting with a task force headed by Korea's ruling party on Tuesday, the president of GM's international operations, Barry Engle, said the company wanted to stay in Korea and fix the business.
The restructuring proposal comes a week after the U.S. automaker announced it would close its factory in the western city of Gunsan by May... and was considering whether to continue operations at its three other plants in Korea.
Sources with direct knowledge of the matter say GM has offered to convert around two-point-two billion U.S. dollars owed by its loss-making South Korean operations into equity,... in exchange for financial support and tax benefits from Seoul.
Nothing has been decided,... but the debt-equity swap would allow GM to continue its business operations in Korea.
Regardless of whether a deal is struck or not,... it seems the state-run Korea Development Bank, which holds a 17 percent stake in GM Korea, is going to be heavily criticized.
Watchers say KDB should have known about the automaker's financial predicament and sounded the alarm long before GM made its surprise announcement.
Following a meeting with a task force headed by Korea's ruling party on Tuesday, the president of GM's international operations, Barry Engle, said the company wanted to stay in Korea and fix the business.
The restructuring proposal comes a week after the U.S. automaker announced it would close its factory in the western city of Gunsan by May... and was considering whether to continue operations at its three other plants in Korea.