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Report: GM Korea to issue 4.3 trillion won in preferred stocks

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Report: GM Korea to issue 4.3 trillion won in preferred stocks

General Motors Co.'s South Korean unit said it will issue preferred stocks worth 4.3 trillion won as part of a deal between the U.S. automaker and state-run Korea Development Bank, or KDB, to save the embattled unit, Yonhap News Agency reported.

GM Korea said the preferred shares, which do not carry voting rights, will be issued in June.

Earlier this month, GM and KDB, two of GM Korea's biggest shareholders, agreed to inject a total of 7.7 trillion won in the unit, with 6.9 trillion won coming from the automaker and 810 billion won from KDB, according to the news agency.

GM, in turn, agreed to allocate two new vehicles to its Korean plants and maintain its operations in the country for more than a decade, in addition to giving KDB the veto power in key management decisions.

The U.S. automaker, last month, reported lower first-quarter net income due to a pretax charge of $942 million related to the restructuring of the struggling unit.

As of May 25, US$1 was equivalent to 1,078.43 South Korean won.