Government requests banknotes to cooperate with’Ssangyong Motor’s conversion of discount bill loans’

Input 2020.12.31 19:06

The government requested banknotes to convert Ssangyong Motor’s bills into loans. In addition, they asked for cooperation not to exercise the right to claim redemption for the bill of Ssangyong Motor.

An official from the financial authorities said on the 31st, “I asked the Ssangyong Motor Bank of Notes to consider how to convert the discounted bills into loans.” The conversion of discount bills to loans is expected to prevent the factory from being’shut down’ due to the suspension of payment of parts by suppliers.

Ssangyong Motors normally pays the delivery price in a three-month-term corporate draft. Partners raise cash by selling bills to third parties such as banks at a discounted price than the principal.

Earlier, Ssangyong Motor stopped operating the factory for two days on the 24th and 28th. When Ssangyong Motors applied for corporate rehabilitation procedures (formerly legal management) on the 21st, it refused to deliver because of concerns that suppliers would not receive payments. Out of a total of 178 billion won for parts supplied to Ssangyong Motors by more than 240 domestic small and medium-sized partners in October, 70 billion won was paid immediately after Ssangyong Motor applied for corporate rehabilitation procedures. The 28 billion won was resolved by extending the billing date in cooperation with the government and the Financial Services Commission. The remaining KRW 80 billion is still not paid to suppliers and remains as a draft.

The government also requested each bank not to exercise the right to claim redemption for Ssangyong Motor bills. The redemption claim right is the right to request the bank to repurchase the bill from the company that received the bill discount if there is a risk of the bill being bankrupt.