SEOUL - Creditors of South Korea's Daewoo Motor Co. are arguing over who should be first in line to recover 650 billion won ($546.1 million) in funds they provided after the failure of the automaker, a newspaper said on Monday.
The Korea Economic Daily said state-run Korea Development Bank and Woori Bank, key creditors, had demanded their loans to Daewoo should be repaid first as the debts were from public money.
But Korea Asset Management Co. (KAMCO), the state-run agency set up to handle bad loans from failed companies, said its debts, which were collateralized, should be repaid ahead of loans by other creditors, the daily reported.
General Motors signed a $400 million deal in April 30 to buy key assets from bankrupt Daewoo, a deal that gives GM a firmer foothhold in Asian car markets and marks a milestone in Korea's corporate reform.
The paper said the launch of the GM-Daewoo joint venture could be affected if the wrangle over the debt repayment was not solved.
Creditors said last week they would meet to discuss a planned $2 billion loan to the joint venture.
Among key points agreed in April was a fresh $2 billion in long-term committed working capital to be provided to the new company by South Korean creditors.