SEOUL– General Motors validated information of a proposed investment in its loss-making South Korean company on Friday, but stated it was subject to support from Seoul and GM’s Korean union. GM Korea stated that without brand-new financing from its major shareholders it would have a first quarter “money crisis.”
Barry Engle, President of GM International, said in a business letter seen by Reuters, that the automaker would tidy up GM Korea’s balance sheet by converting into equity $2.7 billion in debt held by General Motors itself.Engle stated GM would
“fund its portion of the$2.8 billion in investment required to bring items to market and upgrade the tooling and equipment to build them.”The proposed strategies are in line with details formerly reported by Reuters.GM Korea verified the content of the letter however said the carmaker’s additional investments would depend upon a deal in between it and other parties consisting of the federal government and the union.”GM has said it will only offer extra funding if there is arrangement on the needed shared sacrifices with the union, the Federal government and the KDB,” GM Korea said in a statement.KDB is South Korea’s state-run bank that owns a 17 percent stake in GM Korea, which it stated has actually approached 5 commercial banks to raise financing, however these has been declined.Nearly two trillion won($1.88 billion )of GM Korea’s loans to its parent are due by end-March or early April, inning accordance with its regulative filing and the company.KDB stated that Engle satisfied its chairman on Friday and accepted begin a due-diligence on the debt-ridden Korea system next week. The South Korean government states this is a needed action to decide whether to offer monetary support. GM confirms investment prepare for South Korea unit GM to trek Bolt output in drive for EV future GM to trek Bolt output in drive for EV future Chevy broadens Silverado medium-duty lineup in bid to outgun Ford
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