PARIS, Sept 25 (Reuters) - General Motors Corp on Wednesday said its new entity which will control key assets of South Korea's bankrupt Daewoo Motor Co Ltd was not expected to be profitable for about three years.
Nick Reilly, president and chief executive designate of the new entity, to be called GM-Daewoo Auto & Technology Co Ltd, will gain formal control of key Daewoo assets by mid-October, significantly later than originally planned.
Reilly said the new company would report results quarterly, but there were no plans for profits for about three years.
In April, GM, the world's largest automaker, agreed to invest $251 million and take a majority 42.1 percent stake in the joint venture with Daewoo's creditors, while GM's business partners hold 24.9 perecent.
A South Korean newspaper, the Korea Econonmic Daily, said earlier on Wednesday that the GM-Daewoo Auto & Technology would break even in 2005 and focus on exports, citing what it called confidential GM documents. It said the company projected 2003 sales of 5.98 trillion won ($4.9 billion), up 30.5 percent from 2001.
Reilly did not offer any specific profit forecasts, but said GM originally hoped to take the keys to the Daewoo assets within three to four months of the April signing, but negotiations with bankrupt Daewoo Motor Co's creditors delayed the formal handover and launch of operations.
A $12 billion debt write-off deal for creditor banks has been submitted to a provincial court and was due to be finalised this month, a spokesman for the company said.
Reilly said the GM-Daewoo Auto & Technology would take over much of Daewoo's car business, minus some overseas assets, such as its U.S. operations.
While there will be no Daewoo brand going forward in the United States, he said it was possible that GM could rebadge some Daewoo products and sell them under its own U.S. brands.
GM's Chevrolet brand in recent years dropped its small Metro model, built by Suzuki Motor Corp and its Prizm car, built in a California joint venture with Toyota Motor Corp .
GM-Daewoo Auto & Technology will have the capacity to build 800,000 vehicles worldwide, with four plants in South Korea and one in Vietnam, Reilly said.