GM, Isuzu, Banks Discuss Restructuring Initiatives

  TOKYO, Aug. 14 /PRNewswire/ -- General Motors (NYSE: GM, GMH) confirmed
today it is in discussions with Isuzu Motors Ltd. and Isuzu's banks, including
Mizuho Corporate Bank, Ltd., regarding a comprehensive operational and
financial restructuring of Isuzu. 
Isuzu announced the framework of its new three-year restructuring plan
earlier today.  The principal components of the Isuzu restructuring package
include the following: 


       -- GM would acquire a majority ownership of certain Isuzu diesel engine
        businesses and other assets strategic to GM, and complete ownership of
        certain diesel engine technologies, for about Y50 billion (U.S.$420
        million).  GM would appoint a senior executive to support Isuzu
        management.  Isuzu would retire GM's existing equity in Isuzu Motors,
        and GM would purchase new equity for about Y10 billion (U.S.$80
        million), representing a 12-percent ownership stake.
       -- Isuzu's broad financial restructuring would include:  A debt-to-equity
        swap in which Y100 billion (U.S$833 million) of Isuzu debt would
        convert to preferred equity; new funding from lenders sufficient to
        execute the operational plan; and the rollover of certain of Isuzu's
        current debt.
       -- A comprehensive operational restructuring under which Isuzu would
        rationalize under-performing operations as well as its overall
        employment levels.
      General Motors participation


Under the restructuring proposal, GM would spend a total of Y60 billion
(U.S.$500 million).  Of this total expenditure, about Y50 billion (U.S.$420
million) would be used to acquire a majority interest in certain of Isuzu's
diesel engine businesses and complete ownership of Duramax, Circle L 1.7-liter
and V-6 diesel engine technologies.  This includes an acquisition of a
60-percent interest in Isuzu Motors Polska Sp. Z.O.O (Ispol), Isuzu's
small-displacement diesel engine business based in Poland, and an increase
GM's equity investment in the U.S.-based DMAX Ltd. heavy-duty diesel engine
business from 40 to 60 percent.  GM also would acquire a majority interest in
a new diesel engine engineering joint venture with Isuzu as well as rights to
use various related technologies. 
GM, which wrote down the value of its 49 percent investment in Isuzu to
zero in the second quarter of 2001, would have its existing equity in the
company retired as part Isuzu's financial restructuring plan.  GM would then
purchase about Y10billion (U.S.$80 million) of new equity in the company,
leaving GM with a 12-percent ownership stake in Isuzu Motors. 
Finally, GM would identify a senior executive to be co-representative
director of Isuzu, who would support Isuzu President Yoshinori Ida in
implementing Isuzu's new recovery plan. 
"We believe our actions continue to reinforce a collaborative effort that
provides benefits to both GM and Isuzu," said Frederick Henderson, GM group
vice president and president of GM Asia Pacific.  "The initiatives would
provide Isuzu additional liquidity, accelerate Isuzu's recovery, and help
establish a foundation for their future business structure.  For GM, the
proposals would allow us to take control of key technologies that are
important to GM while maintaining our longstanding business relationship with
Isuzu." 
The implementation of the Isuzu restructuring plan is dependent upon
reaching satisfactory conclusions in the discussions among all parties,
including definitive agreements.  GM expects Isuzu and its creditors will
reach agreements shortly so that GM and Isuzu can finalize agreements by
calendar-year-end. 
  In this press release and related comments by General Motors management,
our use of the words "outlook," "expect," "anticipate," "estimate,"
"forecast," "project," "likely," "objective," "plan," "designed," "goal,"
"target," and similar expressions is intended to identify forward looking
statements.  While these statements represent our current judgment on what the
future may hold, and we believe these judgments are reasonable, actual results
may differ materially due to numerous important factors that are described in
GM's most recent report on SEC Form 10-K (at page II-15, 16) which may be
revised or supplemented in subsequent reports on SEC Forms 10-Q and 8-K.  Such
factors include, among others, the following:  changes in economic conditions,
currency exchange rates or political stability; shortages of fuel or
interruptions in transportation systems, labor strikes or work stoppages;
market acceptance of the corporation's new products; significant changes in
the competitive environment; changes in laws, regulations and tax rates; and
the ability of the corporation to achieve reductions in cost and employment
levels to realize production efficiencies and implement capital expenditures
at levels and times planned by management.
  

SOURCE  General Motors 
-0-                             08/14/2002 P 
/CONTACT:  Rob Leggat, +81-90-6313-2734, or Toni Simonetti,
+1-212-418-6380/ 


    /Web site:  http://media.gm.com
                http://www.gm.com/


(GM GMH) 
CO:  General Motors; Isuzu Motors Ltd.; Mizuho Corporate Bank, Ltd.
ST:  Japan, Michigan
IN:  FIN AUT
SU:  RCN
-0- Aug/14/2002  9:13 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.