KDB May Withdraw Loans From GM Daewoo
By Kim Tae-gyu
Staff Reporter
Cash-strapped GM Daewoo Auto & Technology might suffer from further problems if General Motors of the United States does not take more action to support its Korean subsidiary.
Korea Development Bank (KDB) Chief Executive Officer Min Euoo-sung made this point while speaking to reporters Tuesday. The state-run KDB is the biggest creditor of GM Daewoo.
``If General Motors does not play the role of the largest shareholder of GM Daewoo in an appropriate manner, we will start to retrieve loans that will mature this month,'' Min said.
``General Motors should accept both the financial and non-financial requirements of the creditors. If not, we will collect loans and will not participate in a paid-in capital increase,'' he said.
As requirements for General Motors, Min picked expansion of the capital increase, the introduction of the co-chief financial officer system, which will allow creditors to take part in management, and the guarantee of debt payments.
In addition, Min asked General Motors to share licenses for automobiles developed, or under development here, with GM Daewoo, which he says is feared to become a subcontractor of the U.S. carmaker.
This means that General Motors will have to channel much more than 250 billion won to the paid-in capital increase of GM Daewoo, which aims jacking up its capital by 491.1 billion won.
``The 3 trillion capital of GM Daewoo dipped to almost nil due to the international policy of General Motors on foreign exchange forward contracts,'' a KDB official said.
``But General Motors tried to solve the problem by funneling just 250 billion won while obliging banks to supply the rest. Such an attempt is just unacceptable.''
GM Daewoo borrowed approximately 2 trillion won from local lenders in the form of syndicated loans, which were spearheaded by KDB. This month alone, GM Daewoo has to reimburse more than 120 billion won in debts.