The South Korean government can support General Motors’ funding plan of $2.8 billion over the next 10 years upon seeing will and actions from the Detroit-based automaker in turning around its Korean operation, but won’t take in debt of its Korean unit.

GM found Seoul’s terms “reasonable” and agreed to conduct due diligence as quickly as possible for a turnaround outline, Deputy Prime Minister and finance minister Kim Dong-yeon briefed reporters on Thursday following a series of meetings with Barry Engle, GM’s head of international operations.

His vice, Ko Hyoung-kwon, and Lee Dong-geol, chairman of state-run Korea Development Bank (KDB), told Engle that Seoul must see specific actions from GM in order to consider its share of aid under the principle of far pain-sharing among the stakeholders of GM Korea.

Korea demands GM as the majority shareholder to answer for the poor state of the third largest automaker in Korea and come up with long-term plan to turn business around, disclose the details of bookkeeping, ease loan and cost terms for the Korean unit, consult with the KDB, the second largest shareholder, in management progress, increase yields from the Korean operation, commit to objective auditing, and work to gain confidence from other stakeholders, namely the government and employees.

The government rejected the GM’s request for the KDB participation in the plan of converting $2.7 billion lent by the Detroit headquarters into equity by buying back the shares tantamount to the state lender’s existing 17 percent stake in GM Korea.

The American car maker is arguing the debt-to-equity swap would qualify as new investment in GM Korea.

GM reportedly has proposed to turn out new models from plants in Bupyeong and Changwon and keep up annual output to more than 500,000 units. GM Korea, formerly Daewoo Motors before it went under GM global arm in 2001, has four plants that have been running at half of its combined capacity of 910,000 units over the last several years. Earlier this month, GM announced it was shutting down the Gunsan plant that had been yielding 20 percent of its capacity for the last three years and began negotiation with Seoul officials and union to make an “important” management decision by the end of this month.

GM Korea’s deficit over the last four years stretched to 2.5 trillion won and its debt overwhelms capital by 30,000 percent, making it entirely dependent on GM and KDB for new funding.

By Lee Seung-hoon and Choi Mira

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