Ssyangyong Motor, Rejected Audit Opinion, Owes 390 Billion Won Within One Year

Short-term borrowings of 390 billion KRW as of the end of Q1 this year
Urgent extension needed for 90 billion KRW San-eun loan maturing in July
Only 20 billion KRW of the 40 billion KRW Mahindra support fund paid first

[Asia Economy Reporter Su-yeon Woo] Ssangyong Motor, which has been posting losses for 13 consecutive quarters, has been notified of a 'disclaimer of opinion' by an external auditor, and it has been revealed that short-term borrowings due within one year amount to 390 billion KRW. There are concerns that if KDB Industrial Bank does not extend the deadline for a 90 billion KRW loan maturing in July this year, Ssangyong Motor could face bankruptcy and delisting simultaneously.

According to Ssangyong Motor's quarterly report on the 18th, as of the end of the first quarter of this year, short-term borrowings that Ssangyong Motor must repay within one year amounted to 389.9 billion KRW, a 53% increase compared to the end of the previous year.

Additionally, the current ratio, which indicates a company's payment and credit ability, fell by 9.4 percentage points to 41% compared to the end of last year. A higher current ratio means better financial capability, and companies with a ratio below 100% are considered to be exposed to constant liquidity risk. The external auditor, Samjong Accounting Corporation, issued a 'disclaimer of opinion' on Ssangyong Motor's financial statements for the first quarter of this year, reflecting this situation.

Although Ssangyong Motor's debt due within one year is approaching 400 billion KRW, Mahindra, whose financial condition worsened due to the COVID-19 pandemic, withdrew its initially promised investment support of 230 billion KRW and decided to provide only about 40 billion KRW in emergency operating funds to Ssangyong Motor. Even then, due to Mahindra's cash flow issues, only 20 billion KRW was disbursed first on the 4th of this month. The remaining 20 billion KRW was planned to be paid within this month, but considering the local situation in India, the schedule appears uncertain.

Furthermore, the 40 billion KRW emergency support fund is treated as a long-term loan from Mahindra (3-year maturity, 3% interest rate), which is expected to further worsen Ssangyong Motor's financial condition. An industry insider said, "Ssangyong Motor plans to launch Korea's first compact electric sports utility vehicle (SUV) early next year, but it is questionable whether development and launch are possible when it cannot even repay its borrowings immediately," adding, "Ultimately, Ssangyong Motor is left only hoping for government support."

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