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South Korea to offer short-term loans to GM Korea

South Korea is willing to give short-term loans to the local unit of General Motors Co. after April, on the condition that the company cooperate with due diligence, Reuters reported March 14, citing a statement from state-run Korea Development Bank.

KDB reportedly added that the due diligence will continue for two months, beginning March 14.

The bank, which owns a 17% stake in the car manufacturer, kicked off the due diligence process on GM Korea on March 12, according to a separate Reuters report.

The investigation follows the company's plans to reportedly reduce its executive staff and 30% of its workforce, as well as its announced plans to shut down its Gunsan facility by the end of May.

Nearly 2,500 employees, or 15% of GM Korea's workforce, reportedly have applied for a redundancy package, which the company is offering as part of its restructuring plan.

On Feb. 20, South Korean Finance Minister Kim Dong-yeon reportedly said that due diligence on the company should come first before the government commits to any financial support, which GM Korea sought.

Samil PricewaterhouseCoopers is conducting the due diligence process.