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GM reiterates joining GM Daewoo rights offer

General Motors Co's CEO Fritz Henderson reiterated on Thursday the company would take part in any rights offer by its struggling South Korean unit. Fritz, speaking to reporters at a GM Daewoo plant on the outskirts of Seoul, also said he had had “very positive” dialogue with the unit's main creditor, the government-run Korea Development Bank (KDB).

“GM has resources around the world. Resources can be used not only from the US, including operations here in Korea. We are able to provide support, if necessary,” he said, in answer to a question about whether the company would be willing to support any rights offer by its unit.

Last month, GM Daewoo Automotive and Technology said it would raise 491.2 billion won by selling new shares to existing shareholders.

He gave no details, but another GM executive said the issue was still being discussed.

It was not clear whether his remarks meant if he would accept KDB's demands that GM raise more money for GM Daewoo, or face the calling back of maturing loans and foreign exchange forward contracts.

Henderson is due to meet South Korean President Lee Myung-bak later in the day. Analysts say the government, worried about rising unemployment in the global crisis, is keen to save the South Korean affiliate.

GM and KDB are in talks on 1 trillion won ($863.9 million) of additional financial support for GM Daewoo. GM Daewoo has requested additional loans from banks, including KDB, after using up a $2 billion credit line.

The South Korean unit is a critical hub in Asia for GM, responsible for small car design and engineering. (Reuters)