Precondition for Financial Support
"I made a conditional oral promise that we will confirm the cost structure of GM Korea and if GM Korea can survive with a self-help plan, we will consider injecting new funds into the company” said Lee Dong-geol, chairman of the Korea Development Bank regarding three meetings with Barry Engle, executive vice president and president at GM International in a press conference held at the KDB headquarters in Yeongdeungpo-gu, Seoul on March 8.
"The KDB cannot give any financial support regarding the old money," Lee said. "GM's headquarters is entirely responsible for the old money. We began to negotiate with GM under the principle that debts are the largest shareholder's responsibility."
The old money is GM headquarters’ loans to GM Korea. GM Korea will swap the debts for equities and requested the KDB to participate in the debt-for-equity swap as much as the bank’s stake (17%). But the government and the KDB refused the request.
"A working-level consultation is going on as GM Korea has not submitted very sensitive data in the process of consultation for the due diligence inspection,” said chairman Lee, explaining why the due diligence inspection was being delayed.
"Our purpose is not to find out past wrongdoings but to check GM Korea’s cost structure to judge whether or not GM Korea will come back on the right track if GM Korea implements its self-help plan,” chairman Lee said with reference to the purposes of the due diligence inspection.