The Korea Development Bank reportedly is threatening to call in 1.12 trillion won ($959 million) in loans made to GM Daewoo Auto & Technology Co. that mature early in July, unless preconditions are met.
However, a GMDAT spokesman tells Ward’s no ultimatum has been made.
He does confirm two loans totaling 1.12 trillion won were rolled over by KDB-led creditors last week for a 30-day period, and the auto maker is seeking a further extension.
The spokesman also reveals instead of flatly rejecting the preconditions being imposed by the KDB, as reported by local media, efforts are being made to resolve the state bank’s demands.
“The preconditions to long-term financing (and extending the loans due in July) are still under negotiation with KDB, and we are trying to meet them,” he tells Ward’s.
The KDB has three major preconditions: Placing one of its own officials as a GMDAT co-chief financial officer, guaranteeing product volume and transferring licenses for vehicles fromCo. to GMDAT.
“We understand their concerns about GM Daewoo’s future, and we’re trying to find the answers, but we won’t disclose details publicly while things are still in negotiation,” the spokesman says.
“(The) KDB and GM Daewoo are sitting down at the table to talk about these things. We are trying to give them answers and settle their concerns.”
GMDAT President and CEO Mike Arcamone is heading up the team negotiating with the KDB, the spokesman says. On the creditor side, KDB Financial Group Chairman Min Euoo-sung is heading the negotiations.
The auto maker Wednesday hosted a special session for the KDB and 11 creditor banks at its Bupyeong headquarters, the spokesman says. “We shared our current situation and future plans with them.”