GM Offers Debt-for-Equity Swap to Revive S. Korea Unit

General Motors Co. has offered the South Korean government $2.2 billion in equity in a deal to revive its struggling carmaker operations in the country, sources tell Reuters.

Last week GM announced it will close one of its four factories in Korea by the end of May. The company, while expressing a preference to remain in the country, said it also is reviewing the fate of the three other facilities.

The debt-for-equity swap offer includes a GM pledge to recapitalize the ailing unit. In exchange, the company seeks more than $1 billion in tax breaks and financial aid for its GM Korea unit, according to one of the news services’ sources.

Reuters says several sources say GM also has requested that its Korean factory sites be named special foreign investment zones. The move would qualify the plants for seven years of reduced taxes. GM has implied that a decision to award two new vehicle programs in Korea will be contingent upon a deal.

A government official says the country wants more details about why GM Korea has posted 1.9 trillion won ($1.8 billion) in losses between 2014 and 2016 before committing to anything.