Warning from KDB Head
This remark can be regarded as a warning against the HQ, which is planning to file for receivership on April 20 unless unionized GM Korea workers agree to its cost reduction plan.
The chairman also said that he will sign a memorandum of understanding for financial support for GM Korea on or before April 27 if the interim report on due diligence of the company scheduled to be released on April 20 is satisfactory. This remark is a response to GM International President Barry Engle, who recently asked the KDB to give a letter of commitment (LOC) by April 27 regarding investment in GM Korea. In other words, the KDB urged the GM HQ to cooperate to the maximum extent possible during the ongoing due diligence in order to receive a legally binding LOC and the KDB is not going to provide the LOC until the final, not interim, due diligence report is examined.
Earlier, the chairman mentioned that the KDB will make an investment on the same conditions and in proportion to its shareholding in GM Korea, 17.02%, if the GM HQ makes a new investment of US$2.8 billion in GM Korea. In addition, he mentioned, as prerequisites for the new investment, a debt-equity swap and differential capital reduction regarding GM Korea’s US$2.7 billion loans from the HQ.