General Motors acquires larger stake in GM Daewoo

General Motors was the sole subscriber to a KRW491.2bn (US$412.7m) rights offer. In particular, GM’s stake in troubled South Korean unit GM Daewoo has increased to 70.1% from 51% while key creditor Korean Development Bank’s (KDB) stake fell to 17% from 28%.

In a statement, Mike Arcamone, president and CEO of GM DAT, said that the completion of the equity rights issue strengthens GM DAT’s liquidity and balance sheet position and that the company looks forward to resume its strong growth. Arcamone said that it is “grateful for the support and confidence” of its major shareholder. Meanwhile, Nick Reilly, head of GM International Operations, also released a statement saying that GM’s decision to increase its equity in GM DAT denotes the importance of the Korean business unit to GM’s global operations. He said that further actions with regards to the longer term funding structure of GM Daewoo will only be considered if necessary.
Read Article

montyz81 - 10/28/2009 10:03:50 AM

+1 Boost

This has got to go over like a fart in church for the Saturn and Pontiac employees. We are putting more money into a foreign company but we can't sustain Saturn or Pontiac!

EL34 - 10/28/2009 12:16:25 PM

-4 Boost

GM is buying into Daewoo???

I haven't seen one of those POS on the road in a while.

tango - 10/29/2009 2:39:52 AM

+1 Boost

The importance of GM Daewoo in GM's global plan cannot be understood by the average Autospies reader, as I have come to undertsand and expect. Since GM has recognised that there is a world beyond American shores (Can you imagine?) the natural step is to analyse it for potential sales in it. Most developing countries would not readily accept the typical American models (too big, too expensive, engines too thirsty), or the typical European models (too expensive, potentially too delicate for less-than-ideal roads). GM Daewoo, when badged as Chevrolet has been able to provide much needed sales (70.1% instead of 51% of which will now be eligable for return to the US "taxpayer" in an albeit smaller amount) in these markets. You have to spend money to make money, that is one of the first principles of business.