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GM may accelerate Daewoo plan

General Motors Corp may take control of Daewoo Motors Co's main Bupyong plant near Seoul earlier than initially planned, helping to bring marathon talks on asset purchases one step closer to completion.

"If the Bupyong plant is able to revive itself earlier, then General Motors may consider taking it over even before six years' time," said Han Dae-woo, an official at Korea Development Bank, Daewoo Motor's main creditor.

The possibility of an early takeover of the main plan will be included in the final contract, said KDB Governor Jung Keun-yong at a press meeting.

The initial accord, signed in September, offered General Motors the option of buying the plant's output and then acquiring the factory after six years.

Wrangling over job security at the Bupyong plant, which General Motors helped build three decades ago, has been one issue delaying a final accord on Daewoo Motor's takeover. The world's biggest automaker has worried the militancy of the plant's union might hinder efforts to return Korea's No. 2 automaker to profit.

KDB was responding to reports in the Korea Economic Daily and other local media that said the parties have reached a final agreement on the sale of the insolvent automaker's assets. The plan includes General Motors buying Daewoo Motor's biggest domestic plant within three years, the Korea Economic Daily reported, citing officials involved in the transaction.

Shares of Daewoo Motor Sales Corp, the domestic sales agency for Daewoo Motor, rose for a second day as investors bet the US carmaker will soon agree on a purchase.

The value of the transaction has been reduced to about US$1.74 billion, from the original target of US$2.6 billion in an initial agreement in September, Jung said. That's because about US$600 million worth of assets including a plant in Egypt, overseas sales units and auto stockpiles that were in the preliminary accord have been excluded. In addition, US$260 million in debt has been excluded from the transaction, he said.

KDB's Jung said the final agreement will otherwise be similar to the September agreement and will be signed by the end of this month. "We have reached agreement on the main issues but there are still some issues that need to be resolved," he said. "We are doing our best."

Daewoo Motor's plant in Egypt will be excluded from the final agreement and General Motors has reduced the number of overseas sales units it plans to take over, Jung said.
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