GM Daewoo in urgent search for cash

General Motors' Korean subsidiary tries to reassure KDB, its second largest shareholder, of its good intentions in order to receive a much-needed cash injection.

GM Daewoo Auto Technology, General Motors' Korean subsidiary, remains locked in negotiations with its minority shareholder, Korea Development Bank KDB, about the provision of emergency financing.

In February, GM Daewoo asked KDB for new loans, reportedly worth W1 trillion $791 million, after using up its existing credit facilities. GM Daewoo needs the cash because exports, which make up 90% of its revenues, have collapsed, and because the unit has incurred losses from long-US dollar currency hedges.

According to local sources, GM Daewoo needs to conclude the funding talks with KDB within 60 to 90 days. In April, the company's president and chief executive, Michael Grimaldi, warned that liquidity could be critical in...

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