News of October 23, 2002
GM, Partners Complete Asset Transfer With Daewoo Motor Co. New Company Set To Launch
Seoul, South Korea - General Motors Corporation, Daewoo Motor Company, and the Korea Development Bank, acting on behalf of the Daewoo Motor Creditors Committee, today announced the transfer of certain assets of Daewoo Motor Company to a new automotive company called GM Daewoo Auto & Technology Co. (GM Daewoo).
The asset transfer marks the beginning of the new company following definitive agreements signed among the parties April 30 and the approval of the Reorganization Plan of Daewoo Motor Company by the Incheon Court Sept. 30. GM, Suzuki Motor Corp., Shanghai Automotive Industry Corp. (SAIC), and the creditors will be the stockholders in GM Daewoo.
The new company will own and operate three manufacturing plants and a total of nine overseas subsidiaries, including the Daewoo units in Austria, the Benelux countries, France, Germany, Italy, Puerto Rico, Spain, Switzerland, plus Daewoo's European parts operations in the Netherlands. The manufacturing plants are located in Changwon and Kunsan, South Korea, and the automobile operations in Hanoi, Vietnam. Included in the new company are the design, engineering, research and development, sales, marketing, and administration assets located in Bupyung, South Korea.
Daewoo Motors' manufacturing facility in Bupyung, South Korea, will be formed into a new Company, Daewoo Incheon Motor Company, and will continue to supply GM Daewoo with vehicles, engines, transmissions and components for at least six years. The agreements give GM Daewoo an option to acquire this company any time within the next six years. GM Daewoo products will eventually be sold in more than 80 countries around the world.
Other facilities, subsidiaries, ventures, debts and liabilities not included as part of the definitive agreements governing the transaction will be retained by the creditors of Daewoo Motor Company.
Nick Reilly will serve as president and chief executive officer of the new company. "This is the day everyone has been waiting for so long," Reilly said. "GM Daewoo has an impressive work force, an exciting product line up, a proven quality supplier base and a good business plan. Now we can get on with the business of making this company a growing, competitive enterprise."
According to Reilly, a board of directors meeting is scheduled for Monday, Oct. 28, at which time the new company will be inaugurated, the executive team introduced and a new corporate identity revealed. Upon completion of the final equity capital injection, it is intended that General Motors will own 42.1 percent of the new company and Daewoo's creditors will hold a 33 percent stake. Suzuki and SAIC will have a 14.9 percent and 10 percent equity interest respectively in GM Daewoo.
(October 17, 2002)