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GM Plans $3.6 Billion in Loans to S. Korean Unit
General Motors Co. will extend $3.6 billion in new loans to its struggling affiliate in South Korea, sources tell Reuters.
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General Motors Co. will extend $3.6 billion in new loans to its struggling affiliate in South Korea, sources tell Reuters.
About $800 million of the loans eventually will be converted to common stock, according to the sources. They add that Korea Development Bank, which owns 17% of GM Korea, will receive preference shares for its new $750 million investment in the unit.
The plan renews KDB’s ability to block the sale of more than 20% of GM Korea’s assets. Reuters says the bank’s veto power had expired in October.
Last week GM confirmed a debt-for-equity swap for $2.8 billion in existing loans owned by the GM Korea to its parent and 77% owner. The bailout plan was swiftly approved after the Korean carmaker’s labor union agreed to concessions.
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