‘THERE’S TENSION IN INFORMATION SHARING’
Vice-minister says GM Korea not providing info needed to carry out due diligence
SOUTH Korea’s vicefinance minister said yesterday there is tension between General Motors’ (GM) South Korean unit and the Korea Development Bank (KDB) because the United States carmaker isn’t sharing internal information about the company needed for the bank to carry out due diligence.
“My understanding is that there is tension (in the due diligence),” said Vice-Finance Minister Ko Hyoung-kwon after a meeting, here.
The audit on GM Korea’s finances, which started earlier this month, will inform the South Korean government’s decision on whether to provide support for the Detroit carmaker’s loss-making South Korean operations.
GM has offered to convert debt of US$2.7 billion (RM10.55 billion) owed by its ailing South Korean operations into equity in exchange for financial support and tax benefits from Seoul.
“In order to carry out due diligence, which is a difficult process, we need company information but I think (GM Korea) finds it difficult to share information about global strategies (with the KDB),” said Ko.
The state-run KDB, the second-biggest shareholder of GM Korea with a 17 per cent stake, said it was willing to offer shortterm loans to GM Korea after next month, should the company cooperate on the due diligence exercise.
The restructuring plan will see GM’s plant in Gunsan shut down by May. Among its four plants, only one is running at full capacity and the other two are running at 50 and 70 per cent of their capacity.
GM Korea, which employs nearly 16,000 people, has previously said without new funding from its major shareholders it would have a first-quarter “cash crisis”.