General Motors Co is injecting fresh capital into its struggling, debt-ridden South Korean affiliate GM Daewoo Auto and Technology Co by buying all 491.2 billion won (413 million dollars) of new stock it issued, GM Daewoo said Friday, according to dpa. The transaction is to raise GM"s share in the South Korean company from just under 51 per cent to 70.1 per cent after other shareholders, such as the Korea Development Bank, Shanghai Automotive Industry Corp and Suzuki Motor Corp refused to join the offering. "Any further actions relating to the longer-term funding structure of GM Daewoo will be considered if necessary," said Nick Reilly, chairman of GM International Operations. GM Daewoo plans to use the new capital to repay debt coming due, among other things, it said. GM Daewoo and the Korea Development Bank, the company"s largest creditor, are in talks about more than 1 trillion won in further credit. The bank had demanded that the parent GM bring more money to the table for its subsidiary and present a long-term survival plan or it threatened not to extend maturing debt. "GM"s decision to increase its equity in GM Daewoo signifies the importance of the Korean business unit to GM"s global operations," Reilly said. GM chief Fritz Henderson said last week on a visit to South Korea that GM Daewoo should play an important role within the company, considering the rising importance of smaller, fuel-efficient cars. GM itself has struggled through the world economic downturn, emerging from bankruptcy protection in July. --SPA
