SEOUL, May 10 (Xinhua) -- South Korea's government and U.S. carmaker General Motors agreed Thursday to inject 7.15 billion U.S. dollars into GM Korea, the loss-making South Korean unit of GM, Seoul's finance ministry said.
Finance Minister Kim Dong-yeon, who doubles as deputy prime minister for economic affairs, told a press briefing that the country's state-run Korea Development Bank (KDB) and the GM agreed to offer financial assistance worth 7.15 billion dollars to GM Korea.
The U.S. carmaker will convert 2.8 billion dollars owed by GM Korea into shares by the end of this year, offering 3.6 billion dollars for facility investment and operating funds for the next 10 years.
The KDB, the second-biggest shareholder of GM Korea, will offer 750 million dollars to the GM's South Korean unit by year-end to help the company overcome management crisis.
In return for the South Korean government's assistance, GM will be banned from selling shares in the South Korean unit for the next five years. It will be required to maintain its stake above 35 percent for five years from 2023.
The KDB will be given veto power to the GM Korea's key management decisions in return for the money injection.
GM Korea unveiled a plan in February to shut down one of its four assembly factories here by May citing a continued loss. It called for the government assistance to keep itself afloat.