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(LEAD) KDB not to join GM Daewoo's rights offer
SEOUL, Oct. 16 (Yonhap) -- South Korea's state-run Korea Development Bank (KDB) will not take part in a rights offering by GM Daewoo Auto & Technology Co., a bank official said Friday, raising fresh doubts over efforts by the local unit of General Motors Co. to ease its liquidity crisis.
The KDB official also blamed GM Chief Executive Officer Fritz Henderson, who is on a visit to South Korea, for making little effort to secure new funds for GM Daewoo, which is under serious financial strain.
"We expected GM CEO Fritz Henderson to announce something during his visit, but he mentioned nothing other than joining the rights offer," the KDB official said on condition of anonymity.
"Under such a circumstance, we won't provide any assistance, including our participation in the rights offer," the official said.
KDB, the main creditor of GM Daewoo, is also the second-largest shareholder of the local unit of GM with a 27 percent stake.
Since February, cash-strapped GM Daewoo has been in talks with KDB to receive about 1 trillion won (US$859.5 million) in new loans after exhausting a $2 billion credit line.
With little progress made at the talks, GM Daewoo said it would seek to raise 491.2 billion won in a rights offering this month to secure working capital.
KDB, however, is demanding that GM increase the size of the rights offering, arguing the U.S. parent should raise more money for GM Daewoo.
The bank has warned that unless its demands are met it will withdraw all loans from GM Daewoo.
Officials at GM Daewoo's public relations team weren't immediately available for comment.
Earlier in the day, GM Daewoo said it paid back 125.8 billion won in maturing loans to KDB on the same day.
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