Delays to a deal with creditors of Polish car maker Daewoo-FSO might derail the takeover by Britain’s MG Rover, a key shareholder told Reuters.


Reuters said that, after a series of shareholders meetings, owners of the Warsaw car factory agreed on Wednesday to swap the plant’s debt to South Korean suppliers into new equity, transfer buildings and property to a newly formed company and continue operations despite losses.


MG Rover is expected to take a controlling stake in the new company as part of its bid to acquire low-cost production facilities in Poland, Reuters said.


The decision “clears the way for further negotiations” with Daewoo-FSO’s creditors, Zbigniew Gryglas of the state treasury, which has a nearly 10% stake in the plant, told Reuters.


“But it’s hard to talk about a breakthrough,” Gryglas told Reuters after the shareholders meeting. “Step by step, we are moving forward, but since the negotiations are very tough we cannot say right now whether they will end in success.”


According to Reuters, MG Rover has said it would continue output of two Daewoo models for two years and build five of its own cars at Daewoo-FSO’s Warsaw plant, whose annual capacity would reach 200,000 units within a year of the new firm’s creation.