Daewoo Courts Bankruptcy - Brief Article

Automotive Industries, August, 1999 by Mark Bursa

Daewoo's massive borrowings finally caught up with it last month, with Chairman Kim Woo-choong narrowly staving off bankruptcy for his company after creditors agreed to pump a further 4 trillion Won into the company and delay repayment of existing loans for six months.

In return, Kim will have to restructure the entire business, selling off much and focusing what's left on Daewoo Motor. Even then, the independence of Daewoo Motor is not secure, since Korean government officials favor an alliance with a foreign auto maker.

In a surprise move, the government's Financial Supervisory Commission prompted credit banks to immediately start selling the over $8 billion in stock and real estate that Daewoo put up for collateral to get the loan extensions.