According to foreign media reports, on May 9, local time, South Korea’s finance minister stated that South Korea will restrict the rights of GM Korea’s unit to sell its shares and assets. Therefore, GM will operate in South Korea for at least 10 years.
Last month, General Motors and South Korea reached a preliminary agreement to inject $4.35 billion into loss-making South Korea to maintain its operations. Prior to this, General Motors announced plans to close down one of its four plants in South Korea and layoffs. Nearly 3,000.
Kim Dong-yeon, South Korea's finance minister, said in the radio interview, 'We will restrict GM’s right to sell shares in GM Korea and restore the veto rights of Korea Industrial Bank.' General Motors owns 77% of GM Korea. , Korea Industrial Bank holds a 17% stake, SAIC holds the remaining 6% of the shares.
Earlier, the Korea Industry Bank officials said that according to a preliminary agreement with General Motors, the bank will regain veto power to prevent GM South Korea from selling more than 20% of assets. The official said, 'will guarantee at least 10 years (general The car is operating in South Korea. We will ensure that GM will contribute to the Korean economy through the long-term normal operation of General Motors Korea. ' He said that both parties are engaged in the last-minute negotiations to reach a 'blanket agreement', including South Korea. Industrial Bank injected 750 million U.S. dollars into GM Korea and provided 3.6 billion U.S. dollars worth of loans to GM.
It is expected that GM’s remaining three local factories in Korea will also be designated as foreign investment zones, thereby qualifying them for a wide range of tax benefits. If these factories are designated as foreign investment zones, then in the first five years, General Korea Business tax will be exempted and only 50% tax will be paid in the next two years.
Both the General Motors Korea spokesperson and Korea Industrial Bank declined to comment, saying the negotiations are still in progress. GM South Korea CEO Kaher Kazem stated in an internal letter on Tuesday that the company plans to reach an agreement with the Korean government this Friday. The final agreement on binding.
