GM Korea Warns of First-Quarter Cash Crisis

General Motors Co.’s operation in South Korea warns it will face a cash crisis in the current quarter without new funding from its major shareholders.

Reuters notes that almost 2 trillion won ($1.9 billion) in loans between GM and GM Korea are due by about the end of March.

The news service also says GM holds $2.7 billion in GM Korea debt. The U.S. company is ready to convert that debt into equity if a bailout plan can be reached. Reuters says the plan is described in a company letter by Barry Engle, president of GM International.

GM Korea said last month it would need $2.8 billion over 10 years to update its factories and launch new products. GM confirms it would pay it share of that amount—but only along with contributions by its union, the Korea government and the KDB, the state-run bank that owns 17% of GM Korea.

Reuters reports that KDB has approached five commercial banks to raise funds for the bailout, but none has agreed to help.​​​​​​​​​​​