Ssangyong Motor, Mahindra Confirm 40 Billion KRW Fundraising Plan: "Convert to Capital After Loan Settlement"

"Urgent Liquidity Resolved Through Advance Loan Processing... Prompt Conversion to Capital According to Regulations"

Ssangyong Motor Company exterior (Photo by Ssangyong Motor Company)

[Asia Economy Reporter Kim Ji-hee] Ssangyong Motor announced on the 12th that it finalized a plan to raise 40 billion KRW in new funds from its major shareholder, India’s Mahindra & Mahindra (Mahindra), at an extraordinary board meeting held on the 10th. The main point is to handle the funds initially as a loan to urgently resolve liquidity issues and convert them into capital as soon as possible in accordance with the legal regulations of Korea and India.

This extraordinary board meeting was held to approve internally Mahindra’s decision on the 3rd to withdraw its original plan to inject 230 billion KRW into Ssangyong Motor and instead provide 40 billion KRW in special funds.

A Ssangyong Motor official said, "With the final decision to support 40 billion KRW needed for business operations this year out of the funds required for management normalization, market concerns about liquidity have been alleviated. Mahindra is also expected to reaffirm its intention to dispel withdrawal rumors and strengthen support while maintaining its relationship with Ssangyong Motor through this financial assistance."

Earlier, Ssangyong Motor stated that the 500 billion KRW needed for management normalization is not required this year but over the next three years, and that it will secure the necessary funds through early realization of Mahindra’s proposed support plan and cooperation with stakeholders. Additionally, since the sale contract for the Busan logistics center was finalized on the 7th and the sale of non-core assets to raise new funds is progressing smoothly, the company expects that short-term liquidity issues will also be largely resolved.

This content was produced with the assistance of AI translation services.