GM - Daewoo Deal Could Close Before Christmas

SEOUL, Nov 15 Reuters reported that creditors could finalise the sale of South Korea's Daewoo Motor Co to the U.S. General Motors Corp by December 15 if the labour union backs the deal, Daewoo's main bank said on Thursday.

After more than a year of talks, GM signed a memorandum of understanding in September with KDB to acquire four plants from Daewoo, Korea's third-largest automaker measured by sales.

``If the union pact is settled, a final deal is possible by December 15,'' Yoon Jae-min, spokesman of the state-run Korea Development Bank (KDB), told Reuters by phone.

GM and other unidentified investors offered to pay $400 million for 67 percent of a joint venture with creditors, led by KDB, who would kick in $197 million for 33 percent.

For GM, the acquisition would offer production bases in Asia, the fastest growing automobile market in the world.

For South Korea, the deal would mark a major milestone not only for creditors, who have spent more than two years hunting for a suitor for Daewoo, but also for a government keen to show it is pushing reform of debt-laden companies.

Both GM and Daewoo Motor have said they were optimistic that a final deal could be reached by the end of this year.

GM would take over two of Daewoo's domestic and two overseas plants, with a combined annual output topping 500,000 vehicles. Also included in the agreement are all of Daewoo Motor's 22 overseas sales units.

``GM has completed due diligence on Daewoo's overseas subsidiaries,'' KDB Governor Jung Keun-yong told reporters on Thursday.

``Now the collective bargaining contract with the union must be resolved,'' he said.

Earlier this week, Daewoo started talks with its union to revise a contract clause that requires labour's consent for a sale or layoffs.

Daewoo's union, with a history of violent protests, is seeking the reinstatement of more than 1,700 workers at the main Pupyong plant west of Seoul who were laid off in February as part of restructuring efforts.

As of the end of last year, Daewoo Motor's liabilities stood at 22 trillion won ($17.3 billion) compared with 9.1 trillion won in assets.

($1 equals 1274.0 won)