General Motors Co has not subscribed to the $424 million rights issue of its South Korean unit by a Wednesday deadline, according to a report, but its overseas units are now expected to take up the offer.
South Korea's cable TV YTN reported that none of the shareholders of GM Daewoo Automotive and Technology, including GM or state-owned Korea Development Bank (KDB), had participated in the rights offering.
A second subscription open to GM's overseas units will now take place until Friday, and they are expected to take up the offer, a spokesman at KDB said.
"Given that GM is not allowed to take money out of the United States, it seems to have a plan from the beginning to drop the rights and use its units to buy them," a KDB spokesman said.
GM is barred from any of its own $50 billion lifeline from the U.S. government to support overseas and would have to dip into money from its non-U.S. operations.
GM was not immediately available for comment.
KDB said it did not subscribe to the 491.2 billion won ($423.5 million) offer by the Wednesday deadline. It has refused to take part in the offering unless its demand including participation in GM Daewoo's management, sharing licenses for jointly developed cars and GM providing Daewoo more financial aid are met.
KDB is GM Daewoo's No.2 shareholder and its leading creditor.
