General Motors' South Korean unit, GM Daewoo Auto & Technology on Wednesday announced it will repay its $1 billion loan from the Korea Development Bank, ending its row with the creditor over the issue of extending the loan's maturity.
In a statement, GM Daewoo President and CEO Mike Arcamone said the company made the decision based on its improved financial performance.
The 1.126 trillion won loan is under its revolving credit facility with KDB, which will be terminated this month.
This action reflects GM Daewoo's strong financial performance this year enabling us to make full payment on the outstanding facility ... Full repayment of the credit facility will decrease the company's future borrowing costs, Arcamone said.
The company's chief executive Dan Akerson said the Initial Public Offering (IPO) of GM stock was a great success as it raised more than 23.7 billion dollars for principal shareholders.
GM currently controls a 51 percent of GM Daewoo, while KDB has a 27.97 per cent stake.
In the first nine months of 2010, GM Daewoo, South Korea's fourth-largest automaker, recorded total sales of 546,720 vehicles, due to strong overseas demand. Exports still account for the bulk of its sales, with vehicle exports rising 40.7 percent to 459,446. Its sales in Korea are also rising, but still remain limited.