The South Korean government and its state-owned Korea Development Bank reportedly have agreed to provide financing to GM Daewoo Auto and Technology Co. if the auto maker meets certain obligations.
The Chosun Ilbo daily newspaper cites a government source as saying the government and KDB will provide requested new financing if GMDAT guarantees to maintain a stipulated production level and pledges not to pay dividends or distribute any funds toCorp., its major shareholder.
“I cannot confirm if the report is true or not,” a GMDAT spokesman tells Ward’s. “We have no statement, except to say that we are negotiating with Korea Development Bank and continuing to work out our financial problems.”
KDB sources have told the media GMDAT is seeking 1 trillion won ($804 million) in new financing in order to continue its important new product-development work and stay solvent during the current economic downturn.
GMDAT declines to confirm the amount of funds being sought.