- News>
- Companies & Commodities
Daewoo motor plant in India faces liquidation: Report
The Indian plant of South Korea`s ailing Daewoo Motor Co faces liquidation with its capital already eroded by losses, a South Korean newspaper said on Monday.
The Indian plant of South Korea's ailing Daewoo Motor Co faces liquidation with its capital already eroded by losses, a South Korean newspaper said on Monday.
Daewoo Motor's creditors and sister company Daewoo Corp may take on $ 1.05 billion in costs associated with the possible liquidation of Daewoo Motor India Ltd (DMIL), the Seoul economic daily said, citing diplomatic documents. DMIL's operating losses of $ 120 million have eroded 77 per cent of its capital as of end-October, it said. The Indian company has an annual capacity of 72,000 automobiles.
If DMIL is liquidated under Indian regulations, South Korean creditors should pay $ 800 million in penalties, and Daewoo Corp would have to repay $ 250 million it guaranteed for the company to Indian financial firms, it said. Daewoo Corp holds a 91.6 per cent stake in DMIL.
The newspaper said DMIL had asked the South Korean government to extend financial support, and to encourage US auto giant General Motors Corp to take it over.
General motors signed a two billion-dollar agreement in September to take over Daewoo Motor's three plants in South Korea and two overseas factories, in Vietnam and Egypt.
The deal boosted the image of Daewoo Motor, which collapsed last November with an estimated $ 17.5 billion in liabilities. GM has yet to complete due diligence inspections. But it has rejected six passenger car plants in Poland, India, Romania, Ukraine, Uzbekistan and Iran, as well as seven commercial vehicle plants in china, the Philippines, Poland and Czech republic.
Bureau Report
Daewoo Motor's creditors and sister company Daewoo Corp may take on $ 1.05 billion in costs associated with the possible liquidation of Daewoo Motor India Ltd (DMIL), the Seoul economic daily said, citing diplomatic documents. DMIL's operating losses of $ 120 million have eroded 77 per cent of its capital as of end-October, it said. The Indian company has an annual capacity of 72,000 automobiles.
If DMIL is liquidated under Indian regulations, South Korean creditors should pay $ 800 million in penalties, and Daewoo Corp would have to repay $ 250 million it guaranteed for the company to Indian financial firms, it said. Daewoo Corp holds a 91.6 per cent stake in DMIL.
The newspaper said DMIL had asked the South Korean government to extend financial support, and to encourage US auto giant General Motors Corp to take it over.
General motors signed a two billion-dollar agreement in September to take over Daewoo Motor's three plants in South Korea and two overseas factories, in Vietnam and Egypt.
The deal boosted the image of Daewoo Motor, which collapsed last November with an estimated $ 17.5 billion in liabilities. GM has yet to complete due diligence inspections. But it has rejected six passenger car plants in Poland, India, Romania, Ukraine, Uzbekistan and Iran, as well as seven commercial vehicle plants in china, the Philippines, Poland and Czech republic.
Bureau Report