South Korea's financial watchdog warned of new delays in its attempt to sell bankrupt Daewoo Motor Co to US giant General Motors Corp (GM).
Financial Supervisory Commission Chairman Lee Keun-Young warned the government should work out emergency plans for the possible breakdown of negotiations with GM. He made the announcement as it was revealed separately that Daewoo Motor now has $13bn of debt.
'The sale of Daewoo Motor is being delayed longer than expected. A contingency plan will become inevitable if the talks are postponed further,' he told reporters.
GM teamed up with Fiat SpA of Italy to make an offer for South Korea's number two carmaker after Ford withdrew a $6.9bn bid last year.
But as the firm's problems have mounted, talks have been agonisingly slow with both sides giving little information.
Lee said however that there has been progress in the deal, one of the cornerstones of South Korea's corporate restructuring which started at the height of Asia's financial crisis in 1997.
'GM wishes to settle the stalemate as quickly as possible since it has invested considerable resources into its efforts to acquire Daewoo already,' he said. GM made no immediate comment.
