Ssangyong Motor Enters Court Receivership... Files for Rehabilitation Proceedings at Seoul Bankruptcy Court

[Asia Economy Reporter Kiho Sung] Ssangyong Motor, which failed to repay about 60 billion KRW in loans from overseas financial institutions, has finally entered corporate rehabilitation proceedings (court receivership).

According to the legal community on the 21st, Ssangyong Motor reportedly filed for corporate rehabilitation proceedings at the Seoul Bankruptcy Court around 2:45 PM on the same day. Accordingly, the court plans to issue property preservation orders and comprehensive injunctions in accordance with the procedure. Once the comprehensive injunction is issued, all claims will be frozen until the court decides to commence court receivership.

Earlier, on the 15th, Ssangyong Motor disclosed through the Financial Supervisory Service's electronic disclosure system that due to worsening management conditions, there was a shortage of repayment funds, resulting in a delinquency of 60.06161 billion KRW. This amount corresponds to 8.02% of last year's equity capital. By individual banks, delinquencies occurred as follows: 20.02031 billion KRW to JP Morgan, 10.0109 billion KRW to BNP Paribas, and 30.03039 billion KRW to Bank of America (BOA) Merrill Lynch. Additionally, on the day of filing for court receivership, Ssangyong Motor was in a situation where it had to repay 90 billion KRW in loans to the Korea Development Bank.

Ssangyong Motor is currently suffering from a severe liquidity crisis. Even after subtracting the approximately 60 billion KRW loan delinquency on the 15th and the 90 billion KRW borrowing from the Korea Development Bank, the amount to be repaid within one year reaches 74.1 billion KRW.

Earlier, in July, the Korea Development Bank decided to extend the maturity of loans of 70 billion KRW and 20 billion KRW to Ssangyong Motor. In this process, the Korea Development Bank required Ssangyong Motor to first resolve the loan maturity extension issues with foreign financial institutions. Accordingly, Ssangyong Motor partially repaid the loans from foreign financial institutions that matured in June and extended the maturity of the remaining loans.

With Ssangyong Motor entering court receivership, emergency signals have also been triggered for the sale process. Currently, the U.S. company HAAH Automotive Holdings is negotiating acquisition with Mahindra, but no concrete results have emerged. If Ssangyong Motor fails to find new investors, its future will inevitably become more uncertain, as it is difficult for Ssangyong Motor to overcome the current situation without external help.

Samjong Accounting Corporation issued a 'disclaimer of opinion' on Ssangyong Motor's third-quarter quarterly report. Accordingly, Ssangyong Motor has received a 'disclaimer of opinion' for three consecutive times, including the first quarter's quarterly report and the semi-annual report, putting it at risk of delisting.

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