The Korea Development Bank (KDB) and General Motors (GM) agreed to jointly invest US$7.15 billion in GM Korea. Each is going to increase its investment from the previously planned level, with the KDB investing 810 billion won to maintain its 17.02% shareholding in the company.
On April 26, GM President Dan Ammann and KDB Chairman Lee Dong-geol signed a conditional agreement including the investment plan for GM Korea’s revival.
Early this year, GM was planning to invest US$5.5 billion, including US$2.7 billion in the form of debt-equity swap. However, GM increased the amount to US$6.4 billion. The KDB also scaled up its investment from 500 billion won to 810 billion won.
At the same time, GM is going to maintain GM Korea’s manufacturing facilities for at least 10 years and produce some of its new models in South Korea.
The KDB is going to be given a veto right so that it can block GM from leaving the South Korean market earlier.
GM President Dan Ammann visited the National Assembly of South Korea on April 26 to meet lawmaker Hong Yeong-pyo of the ruling Minjoo Party, who is head of the party’s special committee for the GM Korea issue.
“GM can invest the money in GM Korea only after formulating a legally binding written agreement with the South Korean government,” the lawmaker explained, adding, “GM is wishing to wrap up the issue as soon as possible.”