Korea Development Bank will lend GM Daewoo Auto & Technology $US1.6 billion of a total $2.0 billion in funding for the launch of the new firm that includes key assets of Daewoo Motor, Reuters reported.


General Motors agreed in April to lead a $400 million investment in a Daewoo Motor spin-off, which would own three of the South Korean automaker’s manufacturing plants, Reuters said.


“Korea Development Bank will shoulder $1.6 billion, Woori Bank $200 million, and Chohung Bank and Korea Exchange Bank $100 million each,” a spokesman for the state-run bank told Reuters.


Earlier, it was reported in South Korea that GM was set to officially inaugurate its carmaking joint venture with the creditors of failed carmaker Daewoo Motor this Thursday.


Officials at the new venture, GM Daewoo Auto & Technology Co. (GMDAT), were quoted in local press saying that the process of Daewoo Motor’s liquidation would be completed by then.


The GMDAT joint venture will be owned 42.1% by GM, 14.9% by Suzuki Motor Corp., 10% by Shanghai Automotive and 33% by Daewoo creditors.