Date:17/11/2004 URL: http://www.thehindubusinessline.com/2004/11/17/stories/2004111702500200.htm

Back Legal, Govt issues delaying Daewoo deal, says GM

Our Bureau

Mr Aditya Vij, President & Managing Director, GM India, at the launch of Optra NY edition in the Capital on Tuesday. — Ramesh Sharma

New Delhi , Nov. 16

GENERAL Motors India today said that plans to buy the assembly unit of Daewoo Motors India have been delayed due to "legal and Government-related" issues.

According to Mr Aditya Vij, President and Managing Director of General Motors India Ltd, the issue of Customs and EPCG dues is not resolved between the creditors and the Government. "We want to ensure that the unit is free from any liabilities before we purchase it," he said. General Motors had said in March that it plans to buy the assembly plant of Daewoo Motors India to make small cars.

``We have completed our due diligence for the assembly unit. We expect to make an announcement on this issue in the near future, though I cannot give any time-frame," Mr Vij said.

The company is in talks with the creditors to Daewoo India - ICICI Bank, IDBI Bank and Exim Bank - over the purchase of the unit.

Mr Vij added that the company might look at alternative plans if the purchase of the passenger car assembly assets of Daewoo Motors does not materialise.

The Government's dues from Daewoo India are in the form of customs duty claims amounting to over Rs 1,000 crore and also dues resulting from alleged financial mismanagement by the company.

General Motors had acquired Daewoo Motors' passenger car business following the erstwhile Korean Chaebol's bankruptcy during the Asian currency crises. The company, however, had left out the Indian operations in the global deal.

Optra variant launched

GENERAL Motors India on Tuesday launched a new-look Chevrolet Optra to strengthen sales of the sedan.

The base model of the `2005 NY edition' with 1.6 litre petrol engine has been priced at Rs 7.47 lakh (ex-showroom, Delhi), the GMI President and Managing Director, Mr Aditya Vij, said at a news conference. The new model has been given an exterior and an interior facelift.

The car will be available in five variants and the top-end 1.8 litre automatic version will sport a price tag of Rs 10.84 lakh. The 'Chevrolet Optra' was launched in India in July 2003.

Meanwhile, GMI, which has invested Rs 1,300 crore in the country, is in the process of doubling production capacity to 60,000 units annually by February next year at its Halol (Gujarat) plant.