The Korea Herald reports that Daewoo Motor has signed a preliminary agreement to sell its bus manufacturing operations for 140 billion won ($116 million) to YoungAn Hat Co., the world’s largest headwear maker based in Korea.

The report says that Daewoo Motor Chairman Lee Jong-dae and YoungAn Hat Chairman Paek Sung-hak have signed a memorandum of understanding on the hat maker’s acquisition of Daewoo’s two bus plants in Korea and China during a signing ceremony at Daewoo headquarters in Seoul.

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Under the MOU agreement, YoungAn, which also assembles buses and specialty vehicles in Costa Rica, will buy the assets and debts of Daewoo’s bus plant in Busan and a stake in Guilin Daewoo Bus Co., a China-based joint venture with a Chinese firm.

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YoungAn also agreed to take over all Daewoo Motor workers belonging to the bus operations after the formal acquisition deal, as well as the company’s debts to parts suppliers, creditors and employees.

The Korea Herald report adds that over the next month, both parties will engage in the last-stage negotiations for the final contract, with YoungAn conducting due diligence.

The Busan bus plant is reported to have annual assembly capacity of about 5,000 units, with half of its output sold in the local market. The Guilin Daewoo Bus Co. has an annual output capacity of around 3,000 units.