GM Korea, the local unit of the US automaker, said Thursday that the state-run Korea Development Bank has completed recapitalization of $375 million as part of the rescue plan signed in late April, raising prospects of the automaker and its second-largest shareholder narrowing their differences on GM’s spinoff plan.
This is the latest development amid ongoing talks between related parties after a Seoul court approved an injunction against the process related to GM Korea’s spinoff of GM Technical Center Korea on Nov. 28.
The conflict between KDB, GM Korea’s second-largest shareholder, and the automaker surrounding the new R&D entity had left hanging the recapitalization of the remaining half of the $750 million that KDB had agreed to put into GM Korea.
During the National Assembly inspection last month, KDB Chairman Lee Dong-gull said he might halt the recapitalization due at the end of the year, in case of public demand, though he did not view such a decision to be preferable.
KDB had transferred $375 billion earlier this year according to the April deal for GM Korea to normalize operations.
Paik Un-gyu, former minister of trade, industry and energy, and Berry Engle, head of GM International, shake hands in front of GM Korea’s Bupyeong plant on April 6. (Yonhap)
To ease uncertainty made worse by opposition from the union, GM International President Barry Engle had unexpectedly visited Korea earlier this month and met with KDB’s Lee and Rep. Hong Young-pyo from the ruling Democratic Party, with the aim of persuading them to come on board with GM Technical Center Korea.
Meanwhile, officially taking a step back from its push for the spinoff, GM Korea on Thursday filed on the Data Analysis, Retrieval and Transfer System operated by the Financial Supervisory Service that “On Dec. 7, board members agreed to postpone the separation, but will later decide on the detailed schedule.”
GM Korea had initially planned for GM Technical Center Korea to kick off earlier this month.
Signaling progress in talks, KDB also said in a statement earlier this week, “We have carried out multiple talks with GM International President Barry Engle at the request of GM. Documents received from GM are currently being reviewed by a professional agency.”
By Kim Bo-gyung (email@example.com