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Creditors Save Daewoo Motor Sales Again

May 4, 2010
1 min to read


SEOUL — Daewoo Motor Sales Corp. said it again avoided bankruptcy after creditors paid debts worth about $22 million on its behalf to help the South Korean company stay afloat, The Wall Street Journal reported.


Daewoo Motor Sales, a vehicle sales and real-estate development company, owes 2.2 trillion won ($1.98 billion) to financial institutions and was put under a debt-rescheduling program by Korea Development Bank and its other financial creditors in mid-April.

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The company's creditors had earlier given the company a lifeline by separately paying a combined 26.8 billion won of debts on its behalf that were due April 23 and April 26.


The exchange on Monday asked Daewoo Motor Sales to clarify market rumors that it was again in danger of going bankrupt by Tuesday evening, when it had debt worth 24.37 billion won coming due.


"All the debts [due April 30] have been paid," the company said in a regulatory filing Monday with the Financial Supervisory Service.


Trading of Daewoo Motor Sales shares will resume Tuesday morning in Seoul after they were suspended shortly before the market opened Monday, an official at the Korea Exchange said.


Daewoo Motor Sales has lost ground in its main vehicle sales business after its breakup with key vehicle supplier GM Daewoo Auto & Technology Co., the South Korean unit of U.S. auto maker General Motors Co.

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