Daewoo To Sell Engine Factory To GM China

SEOUL January 25, 2004; Dow Jones reported that South Korea's Daewoo Motor Corp. has agreed to sell its engine factory business in Yantai, China, to General Motors Corp.'s China unit, the Yonhap News agency reported Monday.

Daewoo Motor is a remaining company from the bankrupt Daewoo Group, and it now exists only to oversee the sale of the company's overseas units.

GM China will likely pay $60 million to $70 million for Daewoo Automotive Engines Ltd. The purchase price includes the factory's assets and liabilities, the report said, quoting an unidentified official at Daewoo Motor.

"All necessary procedures for the sale are expected to be completed as early as next month. The sale of other overseas factories is also being negotiated actively," Yonhap quoted the Daewoo Motor official as saying.

Daewoo Motor declined to comment on the report.

Daewoo Automotive Engines was jointly established with Sahndong Investment & Trust Corp. in 1996 and produces 300,000 engines annually, a Daewoo Motor official told Dow Jones Newswires Monday.

Daewoo Motor was dissolved in 1999, after its parent Daewoo Group failed to cope with mounting debt, and its Korean auto manufacturing unit was sold to General Motors in 2002.

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