Ssangyong Motor Pyeongtaek Plant in Pyeongtaek, Gyeonggi Province. /Photo = Yonhap News
It is known that the court, which recently started Ssangyong Motor’s corporate rehabilitation procedure (legal management), aims to graduate early when it enters the legal management procedure.
According to the automobile industry on the 4th, the Seoul Rehabilitation Court believes that the decision to take over HAAH Automotive, a leading investor in the United States, has been virtually misappropriated, and it is expected to start court management as early as 8-9 days of this month, at least next week.
The court spoke to Ssangyong Motor on that day that it is aiming for early graduation when it enters court management. Usually, when court management begins, it takes more than four months to submit a rehabilitation plan, and it takes more than a year to complete the rehabilitation, which is interpreted as a willingness to shorten this.
Earlier, the court set the deadline for submitting the letter of intent (LOI) for HAAH on the 31st of last month. Accordingly, HAAH, which has delayed its acquisition decision several times, decided to give a final answer on the acquisition by the date. However, it was a silent answer.
In the end, the court has initiated the legal management process, and requested the Ssangyong Motor Creditors and the Rehabilitation Court Management Committee to ask for opinions on whether or not the legal management was initiated by the 6th. Based on this, if it is determined that the surviving value of Ssangyong Motor is higher than the liquidation value, it is expected to confirm the start of legal management. Conversely, if the liquidation value is evaluated as high, the possibility of liquidation can not be ruled out at this time.
The industry is making observations that Ssangyong Motor’s liquidation value will be higher than its surviving value. Ssangyong Motor’s operating loss last year was 449.4 billion won, an increase of 59% compared to 2019 (281.9 billion won). The capital erosion rate also reached 111.8%, falling into a state of complete capital erosion.
Even if Ssangyong Motor goes through legal management procedures, new investors are needed. This is because the court recently used a merger and acquisition (M&A) method before approval of a rehabilitation plan to prevent liquidation during court administration. It is observed that Ssangyong Motor will also apply the method of finding candidates for acquisition through a public sale procedure led by the court.
Currently, it is known that the Korean electric commercial vehicle company Edison Motors and the court official Park Seokjeon & Company, a subsidiary of the small and medium-sized private equity fund Hyunlim Partners, have conveyed their intention to take over Ssangyong Motor. However, opinions are still divided on the possibility of real success.
Shin Hyun-ah, reporter of Hankyung.com [email protected]
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