SOUTH KOREA: GM aiming for Daewoo Motor agreement 'by end April'
GM is hoping to reach agreement on its purchase of Daewoo Motor assets from the credtitors by 'no later than end April' according to the company's Asia-Pacific boss quoted in a Reuters report.
The report says that reaching agreement by end April would mean that the deal could close by the third quarter of the year.
The comments about the timetable in the Reuters report attributed to Fritz Henderson, GM's new vice president of Asia-Pacific operations, suggest that there is still some way to go in the negotiations, covering areas such as 'which overseas operations GM would take over, claims against Daewoo, labour agreements, supply agreements with parts of the business GM would not be taking over, and complex indemnification issues'.
The report says that when asked how much longer it was likely to take to settle all the issues and sign a definitive agreement, Henderson replied that: "30 days is probably tight. Sixty is probably reasonable."
After more than a year of talks, GM, the world's largest car maker, signed a non-binding deal with Daewoo's creditors in September of last year, saying it was interested in buying four Daewoo plants and other assets for $US400 million.
But one major obstacle to a final deal has been the need for a pact ensuring support from Daewoo's militant union for the sale of the core operations at the carmaker.
Analysts are divided on the wisdom of GM's planned purchase of Daewoo Motor assets. Some say that GM could secure an attractive deal, gaining useful assets at a good price. However, there are those who question the wisdom of any deal, saying that involvement with Daewoo Motor is fraught with problems and that the possible benefits come with substantial strings attached.