SKorea bank collects 108 mln dlr repayment from GM subsidiary
A South Korean state bank on Friday collected $108 million in loan repayments from the struggling local unit of US auto giant General Motors as negotiations continued on a survival plan.autos Updated: Oct 16, 2009 12:09 IST
A South Korean state bank on Friday collected $108 million in loan repayments from the struggling local unit of US auto giant General Motors as negotiations continued on a survival plan.
"Our bank is collecting some 125.8 billion won in maturing loans to GM Daewoo today because there has been no request from the company to roll them over," a Korea Development Bank (KDB) spokesman said.
The move followed talks Wednesday between GM chief executive Fritz Henderson and top officials of KDB, the key creditor of GM Daewoo. It has a 28 percent stake in the local carmaker while GM holds 51 percent.
GM Daewoo, hit by falling demand amid the global downturn, is seeking a one trillion won (855 million dollar) loan after using up a two billion dollar credit line.
It also plans to raise 491.2 billion won in a rights offering this month to secure working capital. Henderson Thursday reiterated the US parent would take part in the rights offering.
KDB is demanding that GM increase the size of the rights offering, arguing that the US parent should raise more money for its subsidiary.
KDB chief Min Euoo-Sung last week urged the US company to offer part of its stake in the local unit as collateral. He also insisted GM Daewoo should be allowed to retain licences for cars that it develops itself.
Newspapers said Friday that KDB also wants a say in management.