SsangYong Motors on the Cliff to Find New Investors’Soojin Bae’

[한국금융신문 곽호룡 기자] Ssangyong Motor’s application for corporate rehabilitation procedures, driven by the edge of a cliff, is believed to have struck a “doubt” to find new investors.

According to the industry, Ssangyong Motor’s major shareholder Mahindra is negotiating the sale of its stake in Ssangyong Motor to HAAH Automotive, an American automobile retailer. When HAAH made a capital increase to Ssangyong Motor, Mahindra reduced its stake in Ssangyong Motor from 74.65% to less than 30% and handed over management rights. Even if Mahindra suffers losses, it seems to be a choice to recover some of the investment as soon as possible.

However, this is blocked by India’s regulations, which prohibited domestic companies from taking over 25% of foreign ownership.

The reason Ssangyong Motor applied for corporate rehabilitation procedures to the court is interpreted to lead to a change in the attitude of the Indian government.

The chairman of the board of directors of Ssangyong Motor, who has decided on the rehabilitation procedure, is Mahindra Pawan Kumar Goenka, President. However, if Ssangyong Motor goes into court management, there is a risk that Mahindra, who loses management rights, cannot save a penny through Ssangyong Motor’s investment. It has been calculated that the Indian government is not just seeing the situation where its own companies are losing more. In a word, it was the camp of the drainage.

Ssangyong Motor’s application for the Autonomous Restructuring Assistance (ARS) program along with the rehabilitation procedure is also a step to increase the time for this. The Korean court accepted the ARS request and held the decision to commence the rehabilitation procedure until February 28 next year. The company’s plan is to find new investors within the period and solve the loan delinquency problem.

The problem is that Ssangyong Motor, which has to prove its management capabilities to investors, is on the verge of stopping production with this measure.

Ssangyong Motor stopped operating its Pyeongtaek plant for two days on the 24th and 28th. This is because parts suppliers such as Hyundai Mobis, S&T Heavy Industries, LG Hausys, Borg Warner Ochang, and Continental Automotive have recently refused to pay for parts. Hyundai Mobis and S&T Heavy Industries resumed delivery, but the rest of the companies are holding on.

It is known that the current Pyeongtaek plant has started partial operation with the remaining inventory. There are concerns that it will be difficult to operate normally early next year.

Reporter Kwak Ho-ryong [email protected]