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GM May Drop Debt-Equity Swap Offer for Korean Unit
General Motors Co. hints it may withdraw a $2.7 billion debt-for-equity offer if union workers at its South Korean unit don’t agree to concessions by Friday, the Korea Herald reports.
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General Motors Co. hints it may withdraw a $2.7 billion debt-for-equity offer if union workers at its South Korean unit don’t agree to concessions by Friday, the Korea Herald reports.
The Seoul-based newspaper says GM also has rejected a request by the government-backed Korean Development Bank for special rate consideration in a restructuring to preserve its 15% stake in GM Korea.
The bank complains it hasn’t received sufficient details from GM about the carmaker’s vow to invest $2.5 billion in upgrades and new products for its Korean plants—if it receives KDB funding and labor concessions.
GM Korea’s losses surged 75% to 1.1 trillion won ($937 million) last year. The company faces a 1.7 trillion-won ($1.6 billion) payment at the end of April on its debt to GM and says it needs 500 billion won ($469 million) by April 27 to cover payments promised to 2,500 workers who agreed to accept buyouts.
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