Sources with knowledge of General Motors’ potential GM Korea restructuring efforts began to detail one of the automaker’s proposed solutions to remain a part of South Korea’s economy. GM has offered a $2.2 billion debt to equity swap in exchange for financial support from the federal government, Reuters reported on Tuesday.
The debt to equity swap would cancel out $2.2 billion worth of debt that GM Korea owes. In this case, it would likely mean the issue of stocks or bonds. However, sources told the outlet that GM seeks over $1 billion in financial support to keep its plants operational in the future.
Another proposal includes naming GM’s assembly plants special foreign investment zones, which would give the automaker tax breaks for seven years. In return, GM would also reinvest in its South Korean operations and bring two new vehicles to the country for production.
Barry Engle, head of GM’s international operations, said discussions are ongoing with restructuring efforts, but he reiterated that GM would prefer to remain in South Korea.
“It is certainly our preference to stay and to fix the business and continue to be an important part of the Korea economy,” he said.
South Korean President Moon Jae-In reacted to the impending closure of GM’s Gunsan plant this week and called on his administration to provide support to the 2,000 soon-to-be-laid-off workers. The union also called GM’s decision a “death sentence” and vowed protests and potentially a strike.