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Report: GM Eyes Takeover of Daewoo

December 5, 1999

SEOUL, South Korea (AP) _ U.S. automaker General Motors Corp. has officially expressed its intention to take over ailing Daewoo Motor Co., a local news agency said Sunday.

Lawrence Zahner, head of GM China, told South Korean reporters in Shanghai that GM hopes to take over Daewoo Motor’s domestic and overseas operations, state Yonhap news agency said.

Zahner said GM would keep the Daewoo Motor brand even after a takeover, but he declined to comment on the progress of talks between the two carmakers, Yonhap said.

A Daewoo Motor spokesman declined comment, saying the company didn’t have sufficient information on the news report.

In Detroit, a GM spokesmen said there was nothing new in the report.

``We’ve expressed our intentions early on,″ said Henry Wong, who manages the company’s international communications. ``Our intention ... is clear: We would like to enter into a strategic alliance with them regarding their automotive side of the business.″

He declined to discuss the status of talks, saying only that more time was needed before there would be any formal announcement.

GM and Daewoo Motor have been in talks on forming a strategic alliance since August.

Daewoo group narrowly escaped going bankrupt when its domestic creditors agreed in June to delay repayment of $8.3 billion in debt for six months and to extend $3.3 billion in new loans.

In return, Daewoo agreed to sell or spin off 13 subsidiaries. Its 12 other units were placed under a debt-restructuring program that calls for creditor banks to turn debts into equity or delay debt payment.

Lee Hun-jai, head of the Financial Supervisory Commission, the government watchdog for corporate restructuring, has said that GM has expressed strong interest in taking over Daewoo Motor.

But there has been no previous confirmation from any GM officials.

Daewoo Motor, South Korea’s second largest automaker, produced 900,000 vehicles last year. At the end of last year, it had $13.3 billion in total assets and $9.8 billion in debt.

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