Daewoo Motor running in the black

Daewoo Motor has notched up two months of operating profits

SEOUL, Japan -- South Korea's troubled Daewoo Motor Co doubled its operating profit to $10 million (13.5 billion won) in May from a month earlier.

This is welcome news for the automaker, which is in the middle of talks with U.S. giant General Motors about a possible takeover.

Daewoo Motor fell into bankruptcy last year with debts of $9.2 billion. Its biggest creditor is the Korean Development Bank..

Daewoo Motor notched up its first operating profit in three years in April, posting about $5 million (6.7 billion won) in earnings before interest and taxes on sales of about $360 million.

It attributed the rising profits to tough restructuring and increased domestic sales and exports. Daewoo sold 51,322 cars in May, it said in a statement.

Profit depends on labor, sales

"Whether we can continue to post operating profits depends on labor problems and sales," Daewoo said in a statement.

"Creditors will provide financial support until June, and we think we will be able to run the company independently from July without their assistance," it said.

South Korea has been trying for more than a year to sell unlisted Daewoo Motor, but progress has been slow.

Price, possible plant closures and reduced labor numbers are seen as the main sticking points

However, there is an expectation GM will announce the outcome of the sale talks soon.

Reuters contributed to this report.