[AJu News DB]
SEOUL -- South Korea's policy lender, Korea Development Bank (KDB), accused the local branch of General Motors of disrupting a due diligence study and refused to provide any new money without looking into its cost structure.
Negotiations have been held over how to rescue GM Korea since the Detroit-based carmaker last month decided to shut down a plant in the southwestern port city of Gunsan by the end of May. KDB, which hold a 17 percent stake in GM Korea, is reluctant to extend a bailout without a viable self-rescue package.
Based on a series of talks with GM Executive Vice President Barry Engle, KDB chairman Lee Dong-gull said Thursday that he promised to consider injecting "new money" for a turnaround if GM Korea provides accounting data on its cost structure.
Lee said a due diligence has been delayed because the automaker did not provide "sensitive data".
GM has offered to convert 2.7 billion US dollars in debt owed by its South Korean operation into equity in exchange for financial support as well as tax and other benefits. KDB has rejected a debt-equity swap, insisting GM should take its responsibility for poor management.
GM's decision on February 13 to close the plant in Gunsan as part of the restructuring of its global business triggered widespread concerns in the regional community. The Gunsan plant has some 2,000 workers and 12,000 others employed at suppliers and subcontractors.
GM Korea, the third-largest carmaker in South Korea, has been hit by falling sales as well as rising costs and debt. GM officials have complained about excessive demands and labor activities by unionized workers.
reporter
Lim Chang-won
cwlim34@ajunews.com
