SEOUL (Reuters) – South Korea’s finance minister said on Wednesday the country will limit General Motors’ (GM.N) right to sell shares and assets in its South Korean unit so that the U.S. automaker is kept from leaving the nation for at least 10 years.
FILE PHOTO: The logo of GM Korea is seen at its Bupyeong plant in Incheon, South Korea March 29, 2018. REUTERS/Kim Hong-Ji/File Photo
Last month, GM and South Korea reached a preliminary deal to inject $4.35 billion into the loss-making unit to keep it afloat. The U.S. automaker has announced plans to close one of its four South Korean plants and cut headcount by almost 3,000 workers.
“We will limit GM’s rights to sell a stake in GM Korea and regain the Korea Development Bank’s veto rights,” Finance Minister Kim Dong-yeon said in a radio interview.
The U.S. automaker owns 77 percent of GM Korea, while KDB holds 17 percent and China’s SAIC Motor Corp (600104.SS) controls the remaining 6 percent.
Under the preliminary deal with GM, the state-run Korean bank will regain veto power that allows it to block the sale of more than 20 percent of the unit’s assets, a KDB official has previously said.
“At least 10 years (of GM staying in Korea) will be guaranteed,” he said. “We will make sure GM will contribute to the South Korean economy by running normal operations for the long term.”
He said the two sides are making last-minute talks to reach a “deal package” which would include an injection of $750 million by KDB into the unit and loans from GM of as much as $3.6 billion won.
A GM Korea spokesman declined to comment, saying talks are ongoing. KDB declined to comment.
Kaher Kazem, CEO of GM Korea, said in an internal letter on Tuesday that it plans to reach a binding, final agreement with the government on Friday.
Reporting by Hyunjoo Jin and Joyce Lee; Editing by Paul Tait and Edwina Gibbs