SEOUL, March 30: US auto giant General Motors Corp. will get a two-billion-dollar loan and tax incentives for acquiring South Korea’s troubled Daewoo Motor Co., a newspaper said.

Creditors are pushing for a final contract with US auto giant General Motors Corp. by April 20 when the creditors submit details of the sale to a court administrator, the Chosun Ilbo newspaper said.

The government and creditors relented on GM’s call for tax breaks and agreed to grant it reductions in acquisition and registration tax, it said.

The daily quoted an unidentified bank official as saying: “The issues of tax cuts and fresh loans for operational funds to GM have been settled.

Another bone of contention, the issue of job security for Daewoo Motor workers, has yet to be resolved but GM shows flexibility in this issue as well.

The union has put up fierce resistance to job cuts, one of the most contentious issues which have delayed the deal.

GM and Daewoo Motor signed a memorandum of understanding last September under which the US firm would only hand over 400 million dollars in cash. But the US company has been reluctant to sing a final contract, citing Daewoo Motor’s hidden debt and union militancy.

Under the September agreement, GM offered to take over Daewoo Motor’s three car plants in South Korea, two of its 12 overseas plants and all 24 overseas sales units.

Recent newspaper reports have said the US firm withdrew demands for a $350m cut in the valuation of Daewoo Motor and agreed to pay $1.2bn in return for fresh loans from creditors. Daewoo Motor filed for bankruptcy in late 2000 with an estimated $17.5bn in liabilities.—AFP