Pol-Mot to take 75% of Daewoo Motor Polska

Pol-Mot Holding SA will take control of 75% of Daewoo Motor Polska Sp zoo, according to a tentative deal signed June 1. The takeover agreement hinges on the restructuring of debts with Polish banks and a Polish government guarantee on $100 million in investment credits.

Pol-Mot won't say what it will pay for the stake, but it does indicate it plans to increase the share capital of Daewoo Motor Polska by $20 million. Pol-Mot Chairman Andrzej Zarajczyk says the payment to Daewoo is to be divided in two parts, with the second installment to be made after production of the new LD-100 family van begins. Daewoo will remain a shareholder with a stake of 15% to 20%.

Lublin-based Daewoo Motor Polska mainly produces the Lublin van, but it also builds the 4-wheel-drive Honker in small numbers. Lublin vans are exported to several countries, including Italy, Spain and Sweden, and sales totaled 12,060 units last year. During the first four months of 2001, van sales fell by 25.5%, causing production to be interrupted for several weeks and hundreds of jobs to be cut.