Daewoo Motor Co. (Q.DMT) may request help running its operations from General Motors Corp. (GM) and Fiat SpA (FIA) even before GM and Fiat finish due diligence on the ailing South Korean car maker, the Financial Times reported Wednesday.
Specifically, GM and Fiat could offer “some advice and interim measures” on running the business, the report said.
The FT said that a Daewoo executive speaking at the Birmingham auto show said Daewoo’s creditors – owed about $16 billion – are expected to sign a memorandum of understanding with GM and Fiat before next month, possibly next week.
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“That could result in a contract being agreed early next year,” the FT quoted the official as saying, adding that GM and Fiat declined comment.
Moreover, people familiar with the situation told the FT that Y.K. Lee is likely to be named president of the group and J.E. Lee could become chairman. The former is a former managing director of a Daewoo plant, the latter is a former chairman of Kia Motor.
“Korea Development Bank (Daewoo’s main creditor) is supporting a new management team for Daewoo, who will lead the company at least until any deal with GM is signed,” the FT quoted an official as saying.
Although the companies have insisted on top-secret negotiations, Fiat and GM are expected to bid for the passenger car assets and related operations of Daewoo and not the entire company.
