GM will invest $251 million, a 42.1 percent stake in the new company, which has yet to be named. Daewoo creditors will hold a 33 percent stake. Certain of GM's business partners will share the remaining 24.9 percent equity interest. The basic framework for the definitive agreements include the following:
- The new company will be capitalized through cash contributions of $400 million from GM and its participating business partners, and $197 million from Daewoo creditors for ownership stakes equaling 67 percent and 33 percent respectively.
- In return for the creditors contributing selected Daewoo automotive assets, the new company will issue to the creditors a long-term redeemable preferred equity with a face value of $1.2 billion and an average annual coupon rate of 3.5 percent.
- The assets to be contributed to the new company include a total of nine overseas subsidiaries and three manufacturing plants. The sales subsidiaries include those in Austria, the Benelux countries, France, Germany, Italy, Puerto Rico, Spain, Switzerland, plus Daewoo's European parts operations in the Netherlands. The manufacturing plants are located in Changwon and Kunsan, South Korea, and the automobile operations in Hanoi, Vietnam.
- The manufacturing facility in Bupyong, South Korea, will remain open and continue to supply the new company with vehicles, engines, transmissions and components for at least six years. The agreements give the new company an option to acquire this plant any time within the next six years.
- The new company will continue to use the Daewoo brand in Korea, in countries where overseas subsidiaries are acquired such as those in Western Europe, and in certain countries where independent distributors exist. In addition, the new company's products will be exported to new markets, such as Mexico and use established GM or GM-affiliated brands. Final branding and distribution plans are still under development and will be announced after the transaction close.