GM Korea will pay dividends for the first time. With projections that the dividend size will reach several trillion won, the Korea Development Bank (KDB), which injected public funds into GM Korea after the closure of the Gunsan plant in North Jeolla in 2018, will be able to recover a significant amount of its funds for the first time in eight years.
GM Korea said on the 6th that it held a board meeting on the 3rd and resolved to implement an interim dividend. GM Korea plans to swiftly complete the relevant procedures to finish paying dividends as soon as possible.
This is the first time GM Korea is moving to pay dividends. After returning to the black with a net profit of 210 billion won in 2022, GM Korea has posted profits for three straight years, including 1.5 trillion won in 2023 and 2.2 trillion won in 2024. Last month, it also announced a $600 million (about 900 billion won) investment plan for its Korea business sites.
GM Korea did not disclose the dividend size, but the market expects it to reach several trillion won. According to last year's financial statements released on the 1st, retained earnings available for appropriation exceed 4 trillion won. Such retained earnings are often used as a source for dividends.
Accordingly, the Korea Development Bank (KDB), which holds 17% equity in GM Korea, is expected to receive dividends in the hundreds of billions of won. When GM closed the Gunsan plant in 2018, KDB invested $750 million in preferred shares to normalize GM Korea's operations. At the time, controversy arose over injecting tax money into GM Korea, which was heavily distressed with low prospects for normalization.
Some also see this dividend as a sign of GM's intention to operate its Korea business sites for the long term. The pledge by the government, KDB, and GM to maintain GM's Korea business sites ends in 2028.
Meanwhile, GM Korea's cash and cash equivalents last year totaled 3.1179 trillion won, up 22% from 2024 (2.5554 trillion won). Net cash, after deducting interest-bearing liabilities such as short- and long-term borrowing fund and financial lease liabilities, came to 3.1091 trillion won and is expected to be used for domestic investment.