General Motors drop plans to acquire Daewoo India car plant

General Motors drop plans to acquire Daewoo India car plant

It has been a long wait and General Motors is not going to wait any longer. The American auto giant and world’s largest maker of automobiles GM has decided that enough is enough and they have called off their plans to take over the Daewoo’s defunct car plant at Surajpur in Uttar Pradesh.

The company blames the government for delaying the proceedings as they failed to settle out of the court with the lenders and ARCIL, the asset reconstruction company in charge of the sale. General Motors has already waited for around three long years in hope of buying the plant and start producing their version of the small car, which is so very popular in the Indian market.

The Daewoo plant in UP has production capacity of 85,000 cars a year and was used to manufacture the cute little Daewoo Matiz. With Daewoo gone, the plant is stuck between the creditors and the potential parties interested in buying the property. GM acquired the company and had shown interest in taking over the manufacturing unit. However, it no longer would be the case.

The three major parties involved were ICICI Bank, Industrial Development Bank of India (IDBI) and Exim Bank. ICICI and Exim Bank have already sold their exposures to ARCIL while IDBI has transferred its exposure to the stressed assets stabilization fund to take care of the non-performing assets of the entity.