General Motors Co. (GM) has subscribed to the 491.2 billion-won (412.7 billion-U.S. dollar) rights offer made by its South Korean affiliate GM Daewoo Auto & Technology Co., the South Korean company said Friday.

"GM's decision to increase its equity in GM Daewoo highlights the importance of the South Korean business unit to GM's global operations,"
Nick Reilly, president of GM International Operations, said in a statement, adding that his firm will continue to play a significant role in the success of the new GM's global business.

None of the other shareholders of GM Daewoo, including KDB, Suzuki Motor Corp. and Shanghai Automotive Industry Corp., participated in the rights offer, the statement said.

GM's recent decision came as its South Korean affiliate seeks for measures to emerge out of a liquidity crisis in the short term.

Even with the current deal, GM is still expected to continue wrangling with South Korea's state-run Korea Development Bank (KDB) to secure fresh loans, South Korea's Yonhap News Agency reported.

KDB, the main creditor of GM Daewoo, is also the second-largest shareholder of the company with a 27 percent stake.

Since February, GM Daewoo has been negotiating with KDB in pursuit of new loans worth about 1 trillion won (840 million U.S. dollars), which did not give fruitful results, though.

Along with the talks with KDB, GM Daewoo also sought rights offering this month to secure working capital.

KDB, however, is demanding GM to increase the size of the rights offering, warning that it will withdraw all loans worth 1.5 trillion won
(1.26 billion U.S. dollars) from GM Daewoo unless the U.S. parent pours more
money.

GM Daewoo said it repaid to KDB 125.8 billion won (105.7 million U.S. dollars) in maturing bonds last week.