| World | Last update: Thursday, June 5, 09:50:03 BST |
GM says talks halted on plan to buy Daewoo engine plant in east China
SHANGHAI (AFX-ASIA) - General Motors Corp said that it has ended talks with the Shandong government and creditors of Daewoo to take over the bankrupt Korean automaker's joint venture engine plant in Shandong in eastern China, though Daewoo said it still hoped for a deal.
"At the end of last year we were approached by shareholders of the engine plant and we had preliminary discussions and I all can say is that those discussions have been discontinued," said Daphne Zheng, director of public affairs and communications for the General Motors China Group.
But a senior official with Daewoo Motor Co in Seoul later said that the talks were proceeding.
"I don't know why such reports are coming out - the talks are still going on. We are planning to conclude the talks as soon as possible," he said.
An official with the Korea Development Bank, one of Daewoo's main creditors, also said "as far as I know, the talks are going on", adding that they are being led by Daewoo itself, not the bank.
Shandong Daewoo Automotive Engines, a 50-50 joint venture between Daewoo and the Shandong government, was not included in General Motor's 1.17 bln usd acquisition of the bankrupt car maker's assets in China in October last year.
A spokesman for the Shandong Foreign Economic Commission would not comment.
GM announced that it had been in talks to purchase the plant in Yantai in Shandong province in December last year, shortly after completing the purchase of the Yantai Bodyshop Corp for 900 mln yuan.
GM holds a 50 pct stake in that operation, now renamed Shanghai GM Dong Yue Motors, while GM China and Shanghai Automotive Industry Corp each hold a 25 pct stake.
Zheng said that the discontinuation of the talks will have no impact on the shift of production of the Buick Sail from Shanghai GM to Shanghai GM Dong Yue, announced at the end of April.
"There is no impact on this operation at all - it's running smoothly and has just started official production," she said.
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