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Daewoo restructuring plan cleared
SEOUL, South Korea -- Daewoo Motor Co.'s restructuring plan has won approval from a South Korean court. That clears the way for General Motors Corp. to form its joint venture with Daewoo, expected the middle of this month. Incheon District Court said it was approving the plan after a majority of the carmakers' creditors voted to accept it Monday afternoon. General Motors is partnering with Suzuki Motor Corp. and another unnamed partner to invest $400 million for a 67 percent stake in the new Daewoo-GM company, GM Daewoo Automotive & Technology. The joint venture will take over three of the company's factories in Korea, a plant in Vietnam, and nine of its international sales subsidiaries. Split into five unitsSuzuki, which is 15 percent owned by GM, will cooperate with the joint venture on buying parts. Daewoo is carrying 19 trillion won in debt ($15.5 billion). Under the restructuring plan, creditors agreed to swap 77 percent of that into stock in the GM joint venture. The rest of the debt will be transferred to other spinoffs, with the plan splitting Daewoo into five companies. Those are the new GM Daewoo Automotive & Technology venture; a bus manufacturing plant in Busan that is being sold to Korea-based Youngan Hat Co.; a truck manufacturing factory that is up for sale; Daewoo Incheon Motor Co., formed to take over its Bupyong factory, its largest; and the remainder of the existing Daewoo that isn't included in the GM deal. Daewoo Incheon Motor Co.'s management says the aim is to return that operation to profitability and then seek a sale to GM. Daewoo went bankrupt in November 2000. GM agreed to buy most of its operations from its creditors in April. GM Daewoo reportedly plans to unveil a compact car in November.
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