Creditors will have 33% ownership.
The world's largest carmaker, which posted first-quarter turnover up nine per cent to £30.7bn, will use the South Korean company to tap into south-east Asia, a market with massive potential for foreign vehicle manufacturers.
The militant union at Daewoo finally signed a pact allowing GM to acquire core operations but only three of 16 plants, clearing a key obstacle to the deal that has been under negotiation for the past 18 months. Analysts expect the other factories, including the main Pupyong plant, to supply components to Daewoo or be off-loaded.
A UK spokeswoman for the company, which is likely to report to GM Europe, says there will be 'no dramatic impact' on Daewoo in the short term. Long-term effects would depend on the terms of the deal signed by GM, she added.
Daewoo has continued to appoint dealers in the UK, replacing its own retail chain. It has signed 23 and claims to be on target to have a network of 53 retailers by the end of the year. Nineteen contracts are waiting approval by 12 dealer groups.
Restructuring charges in Europe under the Project Olympia plan, which included streamlining the dealer network, pulled back GM's first quarter results by £282m, resulting in worldwide turnover of £30.7bn. Revenues were helped by a four-fold increase in US automotive income.
GM Europe posted a loss of £86.5m, excluding the restructuring charge, compared to a deficit of £59.5m in the corresponding period last year.