Incheon to consider retrieving land from GM Korea over spin-off plan

INCHEON, Oct. 21 (Yonhap) -- The South Korean city of Incheon said Sunday it will consider retrieving land that it offered to General Motors Co.'s local unit for use as a test track as the company pushes ahead with a plan to spin off its research division.

GM Korea's shareholders approved the split plan Friday, sparking concerns that the U.S. carmaker may keep only its research facility in South Korea and eventually shut down its manufacturing facilities here.

Incheon provided the 410,000-square-meter land to GM with a 30-year rent-free lease in 2004 and GM Korea opened the proving ground in 2007.

"I ordered the relevant departments to conduct legal reviews (on the possible retrieval of the land)," Park Nam-chun, mayor of Incheon, said on Facebook, adding that concerns about GM Korea's spin-off plan are "reasonable."

In February this year, GM unveiled a restructuring plan for the loss-making GM Korea, including shuttering one of its four plants in South Korea.

GM and the state-run Korea Development Bank signed a binding agreement in May on the rescue package for GM Korea.

Under the agreement, the KDB injected US$750 million while GM will provide $3.6 billion in fresh loans to keep GM Korea afloat.

The agreement prohibits GM from selling any stake in GM Korea over the next five years.
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