Daewoo-GM Starts Negotiations from 4th Next Month

The General Motors (GM) of the United States and Korea Development Bank (KDB) decided to begin a negotiation on the sale of Daewoo Motor Company in an unidentified third country from 4th June and would like to finish the deal as soon as possible. GM is to officially submit a proposal that contains the specific terms and their business plan on 30th.

Both sides has reached an agreement in which GM decided to buy Daewoo with a Purchase and Assumptions (P & A) system and not to take over the plant in Poland.

Allen Parriton, GM’s head of M&As for the Asia-Pacific region, said on 29th that they reached an agreement with Daewoo Motor and its main creditor KDB to begin the formal negotiations on the sale of the assets of Daewoo`s passenger vehicle manufacturing sector and its related business.

Lee Sung-Keun, a director at KDB who is in charge of sale of Daewoo Motor, officially announced on the same day by saying, ``Daewoo and its creditors will begin official negotiations on sale of the assets of Daewoo`s passenger vehicle manufacturing sector and its subsidiary operations.``

Director Lee also said, ``When GM submits a formal proposal on 30th, we will examine the proposal until this weekend and begin the working-level negotiation in the third country from next week.`` ``We decided to exchange the Memorandum of Under-Standing (MOU) as rapidly as possible`` he added.

In the KDB’s negotiation group, Morgan Stanley, Lazard, and Bae, Kim & Lee Law Firm Co. participated as advisors. Both sides plan to decide the range of assets and begin the detailed price negotiation. Therefore, it is expected that they will exchange MOU by 15th, August, the deadline for submitting the company disposition plan, and will sign a final contract after a thorough examination.

GM was conducting an additional examination on Daewoo Motor Sales Corporation, Daewoo Communication CO.’s Boryung plant, and its oversea subsidiaries. GM had submitted a Letter of Intent (LOI) last October and finished the preparatory examinations on companies by the end of last October.

Meanwhile, Kang Woon-Tae, the chair of the Second Policy Coordination Committee, said, ``There will be negotiations on the sale of Daewoo Motor in an unidentified third country from 4th, June.``

Kim Do-Young nirvana1@donga.com