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Monday, 7 January, 2002, 06:21 GMT
Daewoo deal proceeds despite debt fears
Rudy Schlais of GM right shakes hands with Lee Jong-dae, Daewoo Motor Chairman, left, as KDB governor Jung Keun-young looks on
GM's Daewoo takeover is still not a binding agreement
General Motors' plans to buy up key assets of Korean carmaker Daewoo is on track to be completed within a few weeks.

Persistent rumours have suggested that GM has found large holes in the bankrupt Korean company's books - as much as $1.5bn, according to Korean newspaper reports.

That, said the Korean Economic Daily, could prompt a renegotiation, along with suspicions that price manipulation on products shipped between Korean and overseas units has incurred a huge tax liability.

But GM officials indicated that the takeover is still on course, with completion expected in about six weeks.

And a Daewoo spokesman said the reports were "exaggerated".

"Issues regarding potential debt at overseas units have all been settled with GM," he said.

"The size of the reported debt looks absurdly high."

On the table

There still remains the sticking point of agreement with Daewoo's unions, which have been trying to broaden the scope of the takeover and save more jobs.

The terms of the deal currently under discussion call for a $400m payment from GM in exchange for two plants within Korea and two outside the country, in Egypt and Vietnam.

The agreement came after Daewoo was declared bankrupt in late 2000, with liabilities of more than $17bn, more than double its assets.

See also:

24 Sep 01 | Business
Daewoo deal 'favours' GM
21 Sep 01 | Business
GM signs Daewoo deal
18 Sep 01 | Business
GM 'optimistic' on Daewoo deal
31 Aug 01 | Business
Daewoo Motor sale deadline passes
14 Aug 01 | Business
Daewoo Motor sales collapse
10 Jun 01 | Business
Daewoo's fortunes rise
30 May 01 | Business
'GM bids 540m for Daewoo'
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