The company has temporarily suspended production at the two plants.Pointing out that DMIL had incurred 75 per cent to 85 per cent of its losses due to the two units, Mr Kim added that the plants were operating only at 6 per cent to 7 per cent of its capacity utilisation.

The engine and gear box units have a capacity of three lakh units each per annum. The company will decide on these units by the end of May this year, added Mr Kim.

According to him, DMIL was also aiming to achieve independent operations in India. He added that General Motors is expected to submit a final proposal for the takeover of the parent company Daewoo Motors Korea by early April. Mr Kim also indicated that General Motors was interested in the operations of DMIL. DMIL is currently undertaking an internal restructuring plan which has been operational since February 2000. The company has targeted a cost reduction of Rs 62 crore till March 2001. In the next phase, operational and financial restructuring and a cost reduction of Rs 85 crore is being planned. The company has achieved a reduction of manpower by 865 to the current level of 2023 employees.

DMIL is also looking at restructuring its debt. The company may opt for conversion of debt into equity, rescheduling of principal payment and reduction of interest burden, according to Mr Kim.

DMIL plans to convert around $82 million debt taken from Daewoo Motors Korea into equity, which on conversion will raise the parent company's shareholding from the current 92 per cent to 95.22 per cent.