South Korea

General Motors will stay in South Korea for at least 10 years and set up its Asia-Pacific headquarters in the country, government officials said on Thursday, revealing terms of a deal aimed at rescuing the U.S. automaker’s struggling GM Korea unit, Reuters reported. The U.S. car maker’s Korean unit averted a bankruptcy filing with a wage deal clinched last month, but analysts and customers, as well as the South Korean government, have had doubts about GM’s commitment and about how long the loss-making company will remain in business.

South Korea said on Wednesday that an impending deal with General Motors to refinance its local unit will ensure the U.S. automaker remains in the country for at least 10 years, as its rights to sell shares and assets will be curtailed, Reuters reported. GM and South Korea reached a preliminary agreement last month to inject $4.35 billion into the loss-making unit to keep it afloat. GM has also announced plans to close one of its four South Korean plants, cut headcount by almost 3,000 and has reached a deal on wages with its workers.

General Motors’ planned $3.6 billion cash infusion to rescue its South Korean business will be in the form of loans, while Korea Development Bank (KDB) will receive preference shares for its $750 million investment in GM Korea, two sources familiar with the matter said on Wednesday. The Detroit carmaker and state-run KDB agreed last week on $7.15 billion of investment, including a $2.8 billion debt-for-equity swap for existing loans GM Korea owed to its parent, Reuters reported.

General Motors and South Korea have agreed to inject $4.35 billions into the carmaker’s loss-making local arm to keep it afloat after it came close to seeking bankruptcy protection, Reuters reported. GM has been struggling to turn round the debt-laden unit, which has been hit by GM’s exit from Europe where it used to export many of its cars. GM Korea has announced plans to close one of its four South Korean plants and let go 2,600 workers.

South Korea on Friday urged General Motors Co’s local subsidiary and labor union to reach a wage deal swiftly, saying the government will be able to discuss support for the money-losing unit on condition of an agreement. GM, which in February announced it would shut one of its South Korean factories, said it will file for bankruptcy should the union refuse to make concessions by April 20, Reuters reported. GM has also asked for financial support from the government.

Embattled tiremaker Kumho Tire Co. will likely face liquidation if it is placed under court receivership, the top financial regulator warned Thursday. A state-run creditor bank has warned that Kumho Tire will have to submit to court protection unless the tiremaker's labor union agrees on the planned sale of a majority stake in Kumho Tire to China's Qingdao Doublestar Co. by Friday, the Yonhap News Agency reported.

South Korean shipbuilders aren’t out of the woods yet even as orders begin recovering, with the smaller ones facing collapse in the absence of government support, according to a shipping-debt trader, Bloomberg News reported. The government will aid larger shipyards through ways such as giving them orders for the next few years, under its support policy for the shipping and shipbuilding industries, said Soo Cheon Lee, co-founder and chief investment officer of SC Lowy, a Hong Kong-based loan and bond trading firm.

South Korea’s finance minister said on Monday that General Motors Korea’ creditors and its labor union should share the burden of improving the loss-making operation, Reuters reported. “The unions and creditors should together share the burden, and (restructuring measures) should not be temporary but sustainable,” Kim Dong-yeon told reporters. GM Korea announced last month it would shut down a factory in Gunsan, southwest of Seoul, and that it was mulling the fate of its three remaining plants in South Korea.

South Korea’s household debt rose to a new record in 2017, even as the government tightened lending terms to cool the property market. Household debt including credit purchases rose to 1,450.9 trillion won ($1.3 trillion) at the end of December, up 8.1 percent from the previous year, according to a statement from the Bank of Korea. While the pace of increase remained fast, it was the slowest in three years, Bloomberg News reported.

Bitcoin resumed its slide yesterday, dipping below $14,000 as the cryptocurrency’s dizzying drop from a record set 10 days ago intensified, Bloomberg News reported. The latest blow to the world’s biggest cryptocurrency came from South Korea, where the government said it was eyeing options for stamping out a frenzy of speculation, including a potential shutdown of at least some exchanges. Bitcoin fell as much as 11 percent to as low as $13,500 as of 2:02 p.m. in New York, erasing modest gains after the South Korean release, composite Bloomberg pricing shows.