General Motors Company(NYSE:GM) is planning on gaining close to complete control of its South Korean unit by purchasing a 17% stake owned by the unit’s second biggest shareholder. This move has renewed concerns that it could be planning on restructuring steps.
Head of international operations at GM, Tim Lee has made an informal offer to the Chief Executive of the bank, Kang Man-Soo in a meeting held in South Africa this Friday. An official from the bank told this to Reuters. The bank would consider the sale once it receives an authorized proposal.
A spokeswoman of GM has refused to comment.
GM Korea has created after GM took a majority stake in failed Daewoo Moto in 2002. It is the third biggest carmaker in South Korea after Hyundai Motor and Kia Motors. The remaining 6% stake is held by SAIC Motor Corp of China.
South Korea is a small market for GM. However, it is among the US carmaker’s key production bases. It exports Chevrolet-branded cars to Europe and other countries. It accounts for about a quarter of the Chevy production of GM internationally.
Local Media has voiced concern that a deal could give GM a free hand if it carries out reformation at its South Korean plants.
According to Reuters, GM could transfer some Chevrolet production from South Korea to Open in Europe in a bid to recover from its besieged European unit altogether. A top official has said in May that it did not have any such intentions.
The US automaker has also moved to increase control at other Asian units. It said the previous week that it purchased back most of the 50% stake in its Indian operations that it had sold to SAIC Motor Corp, thereby repossessing control of the undertaking.
Shares of the company ended higher by 0.12% to $24.62.