The Korea Development Bank dismissed that Ssangyong Motor’s short-term legal management (P plan) has not yet been decided, and indicated that if it fails to attract investment, it will be difficult to invest funds. It reaffirmed the existing position that additional investment is possible only by proving the viability of the business.
“The investment negotiations between Ssangyong’s potential investors and major shareholder Mahindra are not over yet,” said Choi, Senior Vice President of Korea Development Bank, at a press conference held online on the 2nd. “In the current situation where potential investors have not made decisions, Korea Development Bank has made investments. “I can’t review it.”
“After a diagnosis of potential investors’ investment execution and Ssangyong Motor’s rehabilitation plan, we will agree to the P plan.” “When the investment attraction fails, Ssangyong Motor should begin the normal rehabilitation process, and it is expected that major shareholders will need to attract new investments or strategic investors. “He added.
This is a remark based on the fact that Ssangyong Motor, which is in crisis, is known to promote the P plan. The P plan refers to short-term restructuring that combines court-led court management and creditor-centered workouts. It is characterized by restructuring in a way that the court forcibly adjusts debts and then creditors inject new funds. Therefore, agreement between the company, investors, creditors, and other stakeholders is required.
It is believed that Ssangyong Motor’s rehabilitation plan includes the content that HAAH Automotive, which lowers Mahindra’s ownership (75%) and weighs investment, participates in a capital increase of 250 million dollars (about 280 billion won) to become the largest shareholder. . At the same time, it is said that HAAH Automotive also requested support (about 250 billion won) from the Korea Development Bank.
However, the KDB side drew a line, “As Ssangyong Motor’s specific rehabilitation plan was not prepared, potential investors could not make a final decision on the P plan, and the future schedule has not been decided.”
However, he said, “It is true that a potential investor requested support corresponding to the amount of investment from the creditors,” he said. “If Ssangyong Motor’s rehabilitation plan including the investor’s business plan comes out, we will decide whether to provide financial support after evaluation by an external specialized agency.”
In addition, “the creditors have requested proof of financing from potential investors, but it is judged that it has not been prepared yet,” he said. “If a rehabilitation plan is prepared in consultation with Ssangyong Motor, it plans to receive an investment agreement (LOC) from LP based on that. I know that it is,” he explained.
Along with this, the Korea Development Bank countered head-on to some pointed out that Ssangyong Motor’s P plan could be overwhelmed by the bank’s responsibility theory. The reason for the insolvency of Ssangyong Motor is due to the management failure of its major shareholders, and it is the logic that a’sustainable business plan’ rather than’money’ is needed to save a company that has accumulated a loss of 1 trillion won over the past 10 years.
Meanwhile, the Korea Development Bank referred to GM Korea, saying, “GM Korea received a promise of $6.4 billion in support and allocation of new cars from the headquarters of GM Korea, the largest shareholder, and the second largest shareholder, the Korea Development Bank, also provided $750 million.” In the case of the case, the majority shareholders were unable to fulfill their responsible roles, and potential investors also did not disclose a clear position, so the role that the KDB can perform alone was limited.”
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Instead, the Korea Development Bank plans to pay attention to Ssangyong Motor’s partner companies so that they can resolve the business difficulties.
The Korea Development Bank said, “We are operating a program to support partners in major industries including automobiles (worth 1.5 trillion won) to support partners.” “We are making the most of our existing programs, including funding,” he said.