SY Yi, managing director of Daewoo Motor SA, says his company – which distributes and markets the South Korean brand in Southern Africa – was included in General Motors’s acquisition of Daewoo Motor’s overseas sales subsidiaries.
SY Yi, managing director of Daewoo Motor SA, says his company – which distributes and markets the South Korean brand in Southern Africa – was included in General Motors’ acquisition of Daewoo Motor’s overseas sales subsidiaries.
“The fact that Daewoo Motor SA posted profits in 1999 and 2000, coupled with effective restructuring over the past two years, contributed to the evaluation of the South African company as a desirable acquisition,” he told Business Report on Tuesday.
Daewoo Motor SA entered the local market five years ago and made a loss of about R100 million in its first three years. However, the company made a profit of about R10 million last year despite a 43 per cent decline in sales in November and December due to the financial crisis experienced by Daewoo in South Korea.
General Motors, Daewoo and the Korea Development Bank, acting on behalf of the Daewoo Motor Creditors’ Committee, signed a memorandum of understanding on Friday outlining the terms and conditions, timetable and steps required for the formation of a new company to be owned jointly by the General Motors Group and creditors.
Yi said the new company would have annual revenue of about R42,5 billion and own and operate selected domestic and foreign assets and businesses of the Daewoo Motor business. He added that the transaction would result in “the establishment of a well capitalised firm with strong financial flexibility”.
Yi said both Daewoo and GM were committed to ensuring the company was transformed into a viable, competitive enterprise.
A GM “transition team” would begin work immediately with Daewoo management on the development of an orderly transition plan to continue to stabilise the company, Yi said.
The team would also “ensure the new company’s long-term financial viability, honour existing commitments, ensure the continued supply of vehicles, parts and servicing, strengthen the brand name, and enhance Daewoo Motor’s global reputation for offering customers superior value”, he said.
