labels: passenger cars
Daewoo Motor on the verge of bankruptcynews
07 November 2000

Daewoo Motor, once a show case of South Korea’s industrial prowess, is on the verge of bankruptcy after failing to honour its debt commitment to the tune of Won44.5bn or $39 million. Under Korean laws, a company is considered insolvent after it misses two consecutive days of debt repayments. In the current situation, the company, which is under a debt-restructuring program, shows little signs of being able to pay its maturing loans.

The company’s trade unions have been strongly opposed to job cuts that creditors have been demanding to restore the company back to profitability in two years. As a result of this stand-off, creditors have said they would not provide new loans to Korea''s number two carmaker.

According to industry sources, while the bankruptcy could mar efforts to sell the company to automobile giant, General Motors and its Italian partner Fiat, it might present the creditors with the right opportunity to break up the company and offer it piecemeal to buyers.


 

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Daewoo Motor on the verge of bankruptcy