September 21st, 2001
GM
to save Daewoo’s bacon
General Motors Corporation, Daewoo
Motor Company, and the Korea Development Bank, acting on behalf of the
Daewoo Motor Creditors Committee (creditors), today signed a memorandum
of understanding outlining the terms and conditions, timetable and steps
required for the formation of a new company to be owned jointly by the
GM Group and the creditors. The new company would have annual
revenues of about $5 billion and own and operate selected domestic and
foreign assets and businesses of the Daewoo Automotive business. This
transaction will result in the establishment of a well-capitalized
company with strong financial flexibility. Both partners say they are committed
to ensuring that this company is transformed into a viable and
competitive automotive enterprise. This transaction allows the creditors
to participate in the success of the company while also enabling GM to
achieve its strategic objectives of gaining access to the Korean market
and a strong portfolio of highly cost competitive vehicle platforms, in
support of global strategic initiatives. With the signing of the MOU, General
Motors will immediately begin final due diligence. Both sides anticipate
that a binding set of agreements will be signed before year-end. In addition, a General Motors
transition team is on the ground in Korea and will immediately begin to
work with current Daewoo management on the development of an orderly
transition plan.
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