Korea Development Bank has asked General Motors to raise more money for South Korean unit GM Daewoo or face the calling back of maturing loans and foreign exchange forward contracts.
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Min Euoo-sung, KDB’s chief executive, was quoted as saying in a statement by the state-run bank that GM Daewoo Automotive and Technology should place 162.7m common shares for at least KRW8,000 (US$6.87) each with existing shareholders, Reuters reported.
Last month, unlisted GM Daewoo, for which KDB is a key creditor, said it would place the shares with existing shareholders for KRW3,019 each.
“GM should take the responsibility of a major stakeholder… If GM does not accept the requisite, we will call back maturing loans and forward exchange contracts,” Min told reporters.
KDB also wants GM to guarantee licences for GM Daewoo cars and its unit’s loans, Min added.
The remarks came as GM and KDB are in talks on a some KRW1 trillion of additional financial support for GM Daewoo.
GM Daewoo has requested additional loans from banks, including KDB, after using up a $2bn credit line.
