The Korea Development Bank said it had reached an agreement with General Motors Company to closely coordinate for GM Daewoo Auto & Technology’s long-term development.

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The agreement includes GM’s pledge to guarantee redemption of GM Daewoo’s preferred shares owned by creditors, the Korea Herald reported.

The automaker will also restore its minority rights to the state-owned bank, including the restoration of three seats on its Korean unit’s board of directors.

The pact also includes points on the revision of the cost share agreement between GM and GM Daewoo and GM’s commitment to GM Daewoo’s long-term business targets.

KDB chairman Min Euoo-sung told the paper the agreement guarantees the continued development of GM Daewoo. “We have aggressive business plans for the Korean unit in the domestic market as well as the international arena.”

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Min said he welcomed GM’s commitment during the negotiations. “KDB and GM will maintain relations as cooperative partners for GM Daewoo’s long-term success.”

The agreement was signed between the chairman and Tim Lee, president of GM International Operations, on 3 December, the bank said.

The parties are dealing with working-level tasks for follow-up steps reflecting the agreement.

Last week, GM Daewoo unveiled plans to fully repay its debt totaling US$1bn under a revolving credit facility from the KDB.

GM said the move shows its improved financial condition, which was also illustrated by a huge initial public offering, or issuance of stocks, this month.

A GM executive said, “Following our successful IPO, we will continue to take opportunities to strengthen our balance sheet.”

GM controls a 70.1% stake in GM Daewoo. KDB is the second-largest shareholder with a 17% stake.