GM Buys Daewoo Assets

SEOUL, April 30 Reuters reports that General Motors Corp signed a final agreement on Tuesday to buy key assets of South Korea's bankrupt Daewoo Motor Co for $251 million in cash, capping off more than a year of buyout talks.

The deal marks a major victory for the South Korean government which has pushed to attract foreign capital, and offers GM a far stronger foothold in one of Asia's largest automarkets.

Below are details of the agreement on the sale of Daewoo Motor's core assets to GM:

- New GM-Daewoo company to be capitalised through $251 million cash investment from GM, which will take the largest 42.1 percent stake in the venture, and from its business partners, to hold 24.9 percent. Daewoo's creditors will own 33 percent of the company.

- The new company will operate two plants in South Korea and a car factory in Vietnam. It will also assume eight sales units outside Korea, including seven in Europe and one in Puerto Rico, and a parts unit in the Netherlands.

- GM will buy Daewoo's Kunsan and Changwon plants in South Korea, with a combined annual output capacity over 500,000 compact and sub-compact passenger cars.

- The Changwon plant, which manufactures Matiz sub-compact passenger cars among others, is capable of producing 240,000 automobiles annually. The Kunsan plant, which makes the Nubira compact passenger car and the Rezzo minivan (sold as the Tacuma in the United States), can produce 320,000 automobiles each year. The Vietnam plant can produce 22,000 vehicles each year.

- Daewoo's main production plant in Pupyong will remain open and supply the new GM-Daewoo company with vehicles, engines and other parts for at least six years, with an option to acquire the plant within the next six years.

- Prior to the agreement, Daewoo Motor had four plants in South Korea and 12 plants scattered across 11 countries, ranging from Poland to India. There was no immediate word on the fate of two Korean and 11 offshore plants not included in the deal.