General Motors hikes its stake in GM Daewoo to 70.1%

GM Daewoo helps develop General Motors develop small cars for its global markets...

General Motors recently hiked its stake in GM Daewoo frm 50.9% to 70.1%. Other major shareholders in GM Daewoo include Suzuki Motor Corp., Korea Development Bank, and Shanghai Automotive Industry Corporation (SAIC). GM Daewoo put out a rights issue recently and General Motors was the only major shareholder which chose to hike its stake in the company.

Based in South Korea, GM Daewoo designs and engineers various small and mid-size cars for General Motors and these are sold in various markets all over the world, including India. (The recently launched Chevrolet Cruze and the soon-to-be-launched Chevy Beat have been co-developed by GM Daewoo.) With US$412 million raised in the rights issue, GM Daewoo’s liquidity position is said to have improved. The money will allow the company to pay off some debt and also continue development work on new cars.

‘GM's decision to increase its equity in GM Daewoo signifies the importance of our Korean business unit to GM's global operations,’ said Nick Reilly, GM’s executive vice president and head of international operations. ‘Any further actions related to the longer-term funding structure of GMDAT will be considered if necessary,’ he added.

GM Daewoo’s total sales (including exports) in 2008 stood at 1.9 million units.

Via Detroit News