>Delivered-To: mailing list [EMAIL PROTECTED] >From: [EMAIL PROTECTED] >Date: Wed, 8 Nov 2000 01:55:52 EST > >STOP NATO: �NO PASARAN! - HTTP://WWW.STOPNATO.ORG.UK > >Daewoo Motor forced into bankruptcy as talks fail > >By Jason Neely > > >SEOUL, Nov 8 (Reuters) - Creditors cut off their lifeline to Daewoo Motor on >Wednesday, forcing the automaker with more than $10 billion in bank debt into >bankruptcy after last-minute negotiations with its union collapsed. > >Daewoo had fought with the union for months hoping for a deal to cut jobs and >costs in order to sell the company, with General Motors (<A >HREF="aol://4785:GM">GM.N</A>) and partner Fiat (FIA.MI) the only real >suitor. > >Creditors opened new negotiations with GM and Fiat last month after Ford (<A >HREF="aol://4785:F">F.N</A>) abruptly bolted from exclusive talks in >September. > >Daewoo Motor, the crown jewel in what was once Korea's second largest >conglomerate, is the most high-profile victim left from a 1997 financial >crisis that rocked Asia and toppled several debt-laden Korean firms. > >Shares in listed firms related to Daewoo Motor fell on the news, with sister >automaker Ssangyong Motor (03620.KS) down 125 won at 865 at 0443 GMT after >early gains and Daewoo Motor Sales (04550.KS) off 235 at 1,345. > >The president of Daewoo Motor's main lender, Korea Development Bank, said the >bankruptcy would also have an impact on creditors' efforts to sell the >company. > >"Daewoo Motor is expected to apply for court receivership and it will take a >couple of days because of procedural matters," KDB's Uhm Rak-yong told >reporters. > >"It's hard at this stage to predict what decision the court will make," Uhm >said, but added GM would likely await that verdict before making any move. > >CREDITORS SPARK SHOWDOWN > >Creditors led by the KDB had stepped up pressure on the union last week, >cutting off fresh funds and sending the automaker toward bankruptcy unless a >compromise could be reached over demands, including a call to cut 3,500 jobs. > >Analysts said the creditors had likely demanded reforms from Daewoo's union >based on conditions suggested by automakers interested in buying the firm or >its assets. > >Daewoo Motor defaulted on $77.29 million in debt on Monday and Tuesday, but >KDB gave its union a last-minute reprieve, putting off a response until early >Wednesday in hopes labour leaders would bend. > >"We will not give up hope until the last minute and do our best to avoid a >catastrophe," KDB's Uhm said late Tuesday. > >Daewoo's 13,000-member union on Wednesday refused to go along with the >creditors' demands. > >Lenders have spent almost $2 billion to keep Daewoo Motor afloat since last >year. They hope to sell the firm and related units to avert a collapse that >could mean more than 19,000 lost jobs at the automaker and additional job >losses at its thousands of subcontractors. > >The banks rescued the automaker and 11 other core units of Daewoo Group >DWGR.UL last August and have since tried to reschedule their massive debts in >hopes of selling the firms or their assets. > >A due diligence published in January showed the car company had liabilities >of 17.9 trillion won versus assets of 11.83 trillion. > >Its assets are believed to have fallen in the months of uncertainty since and >Daewoo's plants in Korea's are running at just 60 percent of capacity. > >"The banks run the company anyway, but if you put it into court receivership, >the courts run it, which will probably give the creditor banks a lot more >power and likely accelerate the whole sell-off process," said Samsung >Securities auto analyst Mark Barclay. > >"Either way, you need to deal with the labour issue, but receivership will >give the banks more control," Barclay said. > >Daewoo Motor has five plants in South Korea, as well as operations in Poland, >Romania, Uzbekistan and India with a combined annual capacity topping two >million vehicles a year. > >With South Korea's largest construction firm, Hyundai Engineering and >Construction (00720.KS), also battling to stave off bankruptcy, analysts had >expected creditors to take a tough stand on Daewoo as an example to other >struggling firms. > >01:00 11-08-00 > > >______________________________________________________________________ >To unsubscribe, write to [EMAIL PROTECTED] > >Taking Care of Business is always a snap when you shop with the >world's largest seller of office products. 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