By on October 30, 2009

Hmm... seems more like a different kind of storm (courtesy:wardsauto.com)

It’s not that GM’s Korean Daewoo division doesn’t need more money. The problem is that the only bank willing to lend a dime, the Korean Development Bank, wants strings attached. Since GM came up with the cash to buy up Daewoo’s $413m rights offering, it says Daewoo is out of trouble for two more years. Or 18 months… depending on that troublesome global car market. Meanwhile, GM-Daewoo’s $5b worth of forward contracts will burn up $300m in cash every month, as the debt matures. Although KDB and GM-Daewoo’s other lenders refuse to roll any of that debt forward and have been firm about enacting safeguards before loaning the automaker more money, GM’s Nick Reilly says Daewoo can now negotiate from a position of relative strength. Emphasis on relative.

“Even though we may not need any cash, we would still like to have a credit line for the long term…KDB is one candidate for that,”  Reilly tells The Wall Street Journal. “We will be still in talks with KDB for no urgency.” Because in the meantime GM can keep covering up Daewoo’s $3.6b annual cash burn with non-US bailout funds? Because this time Daewoo has the winning currency hedge numbers? (Daewoo previously lost $2.3b hedging). Or because GM will simply bear any burden to not lose control of its growth-market division? Either way, it’s hard to see how a $413m rights offering makes any difference at all when maturing debt alone slurps down $300m per month.

Get the latest TTAC e-Newsletter!

4 Comments on “GM-Daewoo: No Bailout Needed. For Now. Maybe....”


  • avatar
    brettc

    Winstorm? More like Shitstorm.

  • avatar
    Via Nocturna

    “Winstorm”?

    What a deliciously droll bit of Engrish. From now on, whenever Hyundai rolls out a new product, that word is the first thing that’ll pop into my head.

    “Presenting the all-new 2011 Hyundai Sonata. So good, it’s like a storm of win.”

  • avatar
    TonyJZX

    ‘winstorm’ makes no sense at all

    it’s called the captiva in most western markets i believe

  • avatar
    postjosh

    trust me, the koreans want gm out. they only sold to gm because of imf pressure during the currency crisis. after gm bails, the koreans will combine daewoo with another korean automaker (e.g. samsung) and focus the new company on the chinese and indian markets. there are just too many jobs at stake here and the ssangyoung debacle is still a fresh reminder of the perils of foreign ownership.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Re: Ramcharger Rebirth

    Vulpine - There will be those looking to find the Ram 700 on US highways.
  • Re: Ramcharger Rebirth

    Vulpine - Irrelevant argument in this case, Big Al, as the Blazer and Bronco are equally as old and are centered around an essentially-identical vehicle, just from a different...
  • Re: Ask Bark: A Craigslist Escort (Replacement)?

    modestholdings - We’ve got other things we want to spend our money on, mostly paying off some significant student loan debt and the house. Maybe after...
  • Re: Ask Bark: A Craigslist Escort (Replacement)?

    modestholdings - I’ll keep the Sporty until the wheels come off. After that… haven’t thought that far ahead yet.
  • Re: Ramcharger Rebirth

    Scoutdude - A Ramchager would be easy profits, there is little extra tooling to make a SUV out of the existing Pickup parts and a stripped down version with 10K on the hood, because...
  • Re: Reader Review: 2013 BMW 128i M-Sport

    SomeGuy - Nice car OP. I would advise ditching the “glam” slotted / drilled brakes, for slotted only or blanks. Your pads, and rotors will thank you.
  • Re: SEMA Gives Motor Trend Titty Twister, Evans Cries Uncle

    SomeGuy - Hahaha… Well said!
  • Re: Ramcharger Rebirth

    derekson - Can’t they just sell the Wrangler pickup worldwide as a competitor to Rangers and Colorados and Amaroks, etc? That seems like a smart way to grow the Jeep brand...
  • Re: Ramcharger Rebirth

    Seth Parks - Thank you for noticing VoGo! The advertisements have changed almost as much as the trucks have.
  • Re: Ramcharger Rebirth

    Seth Parks - Depends on which truck you are comparing it to. A Ram 1500 Crew Cab 4×4 tops out at around 5,600lbs, which is a very close approximation of what a full-size Ram SUV...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Bark M., United States
  • Chris Tonn, United States
  • Bozi Tatarevic, United States
  • Vojta Dobes, Czech Republic

Get No-holds-barred, take-no-prisoners Automotive News in your Facebook Feed!

Already Liked