[단독] Ssangyong Motor’s bill, converted to loans… Emergency support for government and business partners

The government decided to convert the bill into a loan form to prevent Ssangyong Motor parts makers from going bankrupt. It is to prevent the worst’shutdown’ due to failure to procure parts. According to the industry and the Pan-Government Ssangyong Motor Partners’ Countermeasure Group on the 31st, the government requested cooperation with KDB Development Bank, the main creditor bank, to convert Ssangyong Motor’s discount bills into loans to improve safety.

The government is expecting to be able to prevent factory shutdown due to a boycott of business partners by converting the discount bills into loans.

Earlier, Ssangyong Motor stopped operating its Pyeongtaek plant for two days on the 24th and 28th due to the refusal of supplying parts to five large business partners. Ssangyong Motors paid for half of the bills related to the delivery price for October, which expired in December, to the partner companies in cash on the 29th and 30th.

Accordingly, Hyundai Mobis and S&T Heavy Industries resumed delivery. It is estimated that up to 80 billion won of bills received by Ssangyong Motor’s small and medium-sized partners have not been converted into cash.

Through this loan conversion, suppliers can improve the safety of payment of residual bills. A government official explained, “From the beginning of next year, we will be able to execute various policy funds through a one-on-one response by each supplier.”

However, the industry believes that it is too early to be comfortable with these measures. It is unclear whether the loan conversion measures will work at the front line. The industry welcomed the government’s measures and ordered urgent action. Vice-Chairman Choi Byeong-hoon of the Ssangyong Motor Cooperative Association spoke with Maeil Economic Daily and said, “If the bill for delivery is converted into cash, it will be a great help to our partners.”

[서진우 기자 / 오찬종 기자]

Ssangyong Motor took a breath… Factory operation is’Mountain to Mountain’

Promote loan conversion of 80 billion bills of delivery

Large parts makers have not yet resumed supply
In case of factory shutdown

For Ssangyong Motor, whose commencement of corporate rehabilitation procedures (formerly legal management) has been postponed until the end of February, the government has announced that it will make efforts to convert bills from suppliers to loans, but there are many challenges ahead of the normalization path of Ssangyong Motors.

First, on the 31st, Ssangyong Motor’s partner companies expressed their welcome at the same time as the government announced the will for efforts. However, the Ssangyong Motor Cooperative Association, which recently formed an emergency countermeasure committee, says that the Ssangyong Motor Cooperative Association cannot be relieved until the problem of surplus money is completely resolved.

On the afternoon of that afternoon, Choi Byeong-hoon, Vice-Chairman and Secretary General of the Ssangyong Motor Cooperative Association, said, “Since Ssangyong Motor’s Pyeongtaek plant is properly operated and sales are generated, small and medium-sized suppliers can survive. “It will be a great help if the government and the financial sector can help together, so that suppliers can hold the delivery price in cash.”

According to the Ssangyong Motor Association, out of a total of 178 billion won in parts-related payments for Ssangyong Motor’s small and medium-sized suppliers in October 2020, 70 billion won was paid by Ssangyong Motor, and 28 billion won was discounted in bills in cooperation with the government and the Financial Services Commission. The government is planning to convert this to a loan from 28 billion won. In addition, it has decided to convert loans for 80 billion won worth of bills that have not yet been returned in cash.

However, this is only the price that was decided to be delivered in October 2020 and settled in December, but the payment in January for the delivery in November remains. Ssangyong Motor can pay this price only by properly operating the Pyeongtaek plant and making sales. Suppliers said, “Some large companies and foreign parts suppliers are not supplying parts due to the rehabilitation procedure, so Ssangyong Motor is facing a crisis of discontinuing production.” “I appeal.

It will not be easy for the Ssangyong Motor plant to return to its fully normalized state. On the 24th and 28th, Ssangyong Motor’s Pyeongtaek plant could not be operated at all, and on the 29th in the morning, Hyundai Mobis and S&T Heavy Industries resumed supplying parts and some of the factories returned, but other large parts makers did not immediately deliver.

In the end, the key depends on whether Ssangyong can increase sales and attract new investments through high-strength restructuring by operating the plant quickly and normally. Ssangyong Motor plans to resolve the liquidity crisis by completing new investment negotiations with US auto retailer HAAH Automotive through India’s Mahindra Group, a major shareholder.

It is known that HAAH has set a policy that Mahindra can invest by participating in a capital increase only when the existing stake is reduced. It is asking to lower Mahindra’s 74.6% stake in Ssangyong Motor to less than 30%. However, the Indian government does not allow its own company Mahindra to sell more than 25% of its shares to foreign-invested companies. An industry insider pointed out, “In order to prove that the survival of the company is more valuable than liquidation, Ssangyong Motor should also make efforts to supply parts and normalize the operation of the factory by solving the problem of suppliers first.”

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