The troubled Korean conglomerate Daewoo is selling a majority stake in its motor manufacturing business, Daewoo Electric Motor Industry, to Emerson Electric for $50m (£31.2m). Under the deal, Emerson, the world`s largest motor manufacturer, will acquire 80% of the company`s shares and will take over Daewoo`s motor factory in Tianjin, China. Daewoo Electronics, the motor firm`s parent, has the right to sell its remaining 20% stake to Emerson in three years` time.

The Daewoo company produces around 15 million motors a year with sales last year amounting to some £41.3m. Its Chinese factory has an annual production of two million machines worth around £4.4m.

The sale of Daewoo`s electric motors business is expected to be finalised next month (September). The sell-off is part of the conglomerate`s plan to alleviate its debts of more than £30bn. The group, Korea`s second largest, was saved from bankruptcy in July when its creditors agreed to roll over debts and provide new loans. Further sell-offs are likely and Daewoo may end up with just its car-making operation.