Creditors of the South Korean car manufacturer, Samsung Motors, have approved Renault’s takeover of the firm. The deal – worth $560 million – gives Renault a 70% stake in the company.

Samsung’s 16 creditors agreed to Renault’s bid following negotiations between the two sides at the weekend in Paris.

The agreement marks the first time a foreign car maker will be allowed to operate in South Korea.

Foothold in South Korea

The deal gives Renault a foothold in the South Korean market, which correspondents say is one of Asia’s largest and least accessible.

Of more than 900,000 cars sold in South Korea last year, fewer than 3,000 were imported.

Up until now, the market has been controlled by three domestic car companies – Hyundai, Kia and Daewoo.

Under the terms of the deal, Renault will take over the Samsung brand name, its national commercial network, the company’s ultra-modern plant in the southern port city of Pusan and its research and development centre.

The Pusan plant is capable of producing 240,000 cars a year – although at present, it is only working at 25% capacity.

Samsung Motors has been in receivership for more than a year, with $4 billion of debts.

The company was severely hit by the 1998 Asian financial crisis, when the car industry globally faced a slowdown.