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GM, Korea Development Bank finalize negotiations on GM Korea

Staff Writer |
The state-run Korea Development Bank(KDB) and General Motors(GM) on Friday signed a Framework Agreement on the cash-strapped Korean unit of the U.S. automaker.

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With the deal, GM Korea's two largest shareholders have finalized their negotiations over how to normalize the Korean unit’s businesses.

Neither side disclosed the details of the agreement, but it's known to be the same as the one expressed last week in KDB's Letter of Commitment to GM.

It's believed GM and KDB will inject rescue funds of over seven billion U.S. dollars into GM Korea.

Of the total, GM will shoulder six-point-four billion dollars by converting GM Korea’s two-point-eight-billion-dollar debts into equity and investing three-point-six billion dollars in equipment for its Korean unit.

As GM Korea's second largest shareholder, KDB will pay the remaining 750 million dollars this year to help the automaker invest in facilities.

GM is banned from selling its shares in GM Korea for the next ten years while KDB maintains veto rights over GM’s major decisions regarding GM Korea.

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