In Response to Ssangyong Motor's Rehabilitation Application... Government Launches 'Parts Supplier Support System'

[Image source=Yonhap News]

[Asia Economy Reporter Kang Nahum] The government has decided to activate a support team to prevent a chain reaction of shocks among parts suppliers following Ssangyong Motor's application for rehabilitation procedures.

On the 21st, government ministries including the Ministry of Trade, Industry and Energy, the Financial Services Commission, and the Ministry of SMEs and Startups announced, "We will operate a system to resolve difficulties faced by parts suppliers due to Ssangyong Motor's rehabilitation application."

Earlier, Ssangyong Motor, having suffered losses for 15 consecutive quarters and unable to repay 165 billion KRW in loans borrowed from financial institutions, filed for corporate rehabilitation procedures at the Seoul Bankruptcy Court on the same day.

The government plans to provide maximum financial support to Ssangyong Motor's partner companies by utilizing policy finance programs from the Korea Development Bank and the Small and Medium Business Corporation, as well as extending loan maturities.

Additionally, centered around the Ministry of Trade, Industry and Energy and the regional SME offices in Gyeonggi and Chungnam, a support team for partner companies will be activated to closely monitor the parts industry situation. For companies facing difficulties, dedicated staff will be assigned to provide one-on-one customized assistance.

The government stated regarding Ssangyong Motor's rehabilitation application, "This is not a typical rehabilitation procedure but an ARS (Auto Restructuring Support program), and the direction of processing will be decided after about three months of consultations among creditors and other stakeholders." It also added, "The rehabilitation application was made based on the independent management judgment of Ssangyong Motor's management."

The government said, "Despite the rehabilitation application, negotiations for the sale of Ssangyong Motor are still ongoing," and added, "We especially expect good results through active cooperation among the major shareholder Mahindra, related stakeholders, and domestic and international creditors."

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