GM-Daewoo Finally Pays Down Its Debt

Edward Niedermeyer
by Edward Niedermeyer

The Korean Development Bank, which owns 17 percent of GM’s GM-Daewoo Korean subsidiary, has been rolling about a billion dollars in Daewoo’s debt over on a monthly basis for most of this year. The debt, a legacy of a $2b+ loss on currency speculation. Now, The Korea Times reports that GM-Daewoo has paid back about a billion of that mature KDB debt, as GM-Daewoo boss Mike Arcamone explains

this action reflects GM Daewoo’s strong financial performance this year enabling us to make full payment on the outstanding facility … Full repayment of the credit facility will decrease the company’s future borrowing costs

And the emphasis on future borrowing is not just boilerplate either. GM-Daewoo has been negotiating for about a billion more dollars in loans from KDB, a deal the bank was not willing to consider without greater control over Daewoos operations and greater independence for the GM subsidiary. GM tells Bloomberg those talks are ongoing, and refuses to give details about possible concessions over future KDB equity rights or technology-sharing agreements. And since Daewoo’s financial results are stashed away inside the big “GM International” tent, we don’t know the true state of Daewoo’s health (although sales are up nearly 33 percent compared to last year). Though less immediately troubled than Opel, GM’s Korean division still has many mountains to climb.

Edward Niedermeyer
Edward Niedermeyer

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  • Blowfish Blowfish on Dec 01, 2010

    is sure nice to see them in the black, no fun to see them sputter along, looking for bail outs either, god bless all of us.