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On the 28th, the Seoul Rehabilitation Court accepted Ssangyong Motor’s application for the’Autonomous Restructuring Support’ (ARS) program. With the ARS program in operation, the court is set to decide at the end of February whether or not to initiate the rehabilitation process filed on the 21st.
From the perspective of Ssangyong Motor, it is best to find a new owner by agreeing with stakeholders for the next time, but it is analyzed that negotiations will not be smooth inside and outside the industry.
法 “Pending commencement until February 28”
According to law enforcement officials on the 28th, the Seoul Rehabilitation Court Rehabilitation Division 1 decided to accept the ARS program application submitted by Ssangyong Motor on the 21st along with the corporate rehabilitation application and the company property preservation disposition. According to the decision, the court said, “The decision to commence rehabilitation procedures will be withheld until February 28, 2021 in order to support consultations on restructuring between debtors and creditors.”
The ARS program means that the court delays the initiation of the rehabilitation process. During that period, Ssangyong Motor can discuss restructuring issues autonomously with major creditors while operating normally.
If Ssangyong Motors attracts investors during the holding period and finalizes an agreement with creditors, it can return to the state where there was no application for rehabilitation. On the other hand, if no agreement is reached, the rehabilitation process will proceed again.
According to the legal community, the court is said to have started operating the ARS program only until February 28th and not extending the ARS period after that.
Key to’Finding a New Owner’ including negotiations with HAAH
Meanwhile, analysts say that negotiations will not be easy, as Ssangyong Motors is in the process of concluding homework to be solved in the future, both inside and outside the automobile industry.
With India’s largest shareholder, Mahindra, abandoning its position as the largest shareholder, the issues are how to lead negotiations with the US auto retailer HAAH, whether it can sufficiently prove Ssangyong’s continued corporate value, and whether it can come up with a practical restructuring plan.
Among the multiple unions of Ssangyong Motors, the corporate union announced on the 23rd that “we do not oppose the rehabilitation procedure that guarantees total employment.”
According to the legal account, “There is a possibility that Ssangyong Motor will pass the ARS period without any results,” and “If there is no sharp point, it may be the way to start the rehabilitation procedure sooner.”
When the rehabilitation procedure commences, the court appoints managers and investigators for Ssangyong Motor. The investigators evaluate Ssangyong Motor’s debt situation, make a report, and when an opinion is suggested that the rehabilitation process can continue, the court orders the manager to submit a rehabilitation plan.
If there is no legal problem in the plan and the court approves it, the manager can carry out the rehabilitation plan.
As of September, Ssangyong Motor’s assets were 1.69 trillion won, and its liabilities were 1.589.3 billion won.
Reporter Nam Jung-min [email protected]