South Korea has decided to provide funds for U.S. automaker General Motors'(GM) plan to invest two-point-eight billion dollars into its ailing operation in South Korea. 

However, the government and the state-run Korea Development Bank, which holds a 17 percent stake in GM Korea, have decided to reject the automaker's request to join its two-point-seven billion dollar debt-for-equity swap.

A Seoul official said that the government and the bank highly appreciate GM's decision to convert two-point-seven billion dollars owed by GM Korea into equity to keep the operation alive, but the bank finds it difficult to join the equity swap.

Government officials plan to meet visiting GM International President Barry Engle on Thursday and convey the decisions. 

The U.S. automaker recently proposed an investment of two-point-eight billion dollars into its loss-making South Korean operations and had asked Seoul to provide its share of the funds.

It also offered a debt-for-equity swap to get financial support and tax benefits from Seoul, asking the bank to join the swap plan for its 17 percent shareholding.