General Motors says it intends to hang on to South Korea’s Daewoo, in which it is a majority shareholder. The men in Detroit prize Daewoo’s small car and engineering skills, and deny they are about to let the state-run Korea Development Bank raise its stake to 30 percent.
But GM says if it will help the company’s long term prospects it will consider any offer from the KDB. The bank is the company’s main creditor, and Daewoo has used up its credit line and is seeking additional loans from a number of banks. However GM is currently only surviving itself on huge quantities of US government cash, and it may need to sell to improve liquidity. Its bondholders are bidding to take control, and if they cannot, make GM the second of the big three US carmakers to file for bankruptcy.