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The Korea Herald
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THE INVESTOR
March 29, 2024

Automobiles

GM Korea to get US$7b investment in rescue deal

  • PUBLISHED :May 10, 2018 - 14:33
  • UPDATED :May 10, 2018 - 14:33
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[THE INVESTOR] The Korean government and General Motors agreed to provide a total of US$7.15 billion in fresh investment for the US carmaker’s struggling local unit, officials said on May 10.

Under the agreement, GM will convert US$2.8 billion owed by GM Korea into shares and extend loans worth US$3.6 billion for the local unit for facility investment, Korea’s Finance Minister Kim Dong-yeon told reporters.

State-run Korea Development Bank, the second-largest shareholder of GM Korea, will inject US$750 million into the loss-making unit by the end of this year. The funds will be used to keep the company running.

GM will be banned from selling any of its stake in GM Korea over the next five years to prevent it from exiting the Korean market, Kim said.

From 2023 to 2028, GM will be required to keep its holding in GM Korea above 35 percent, Kim said.

GM also pledged to allocate two new vehicles to its Korean plants and agreed to give the KDB veto power in key management decisions, making it impossible to leave the country.

By Song Seung-hyun and newswires (ssh@heraldcorp.com)

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