Ssangyong Motor Files for Rehabilitation Proceedings... Support System Activated for Partner Companies' Loan Maturity Extensions and More

Utilization of Policy Finance Programs by San-eun and Jungjingong and Loan Maturity Extensions
Operation of Support Team for Partner Companies by Ministry of Industry and Small and Medium Business Offices in Gyeonggi and Chungnam Regions

[Image source=Yonhap News]

[Asia Economy Reporter Kangwook Cho] A support system including policy finance programs and loan maturity extensions will be activated for Ssangyong Motor's parts suppliers. This is an emergency measure following Ssangyong Motor's application for corporate rehabilitation procedures on the 21st.

On the same day, related ministries such as the Ministry of Trade, Industry and Energy, the Financial Services Commission, and the Ministry of SMEs and Startups announced that they will activate a system to resolve difficulties faced by parts suppliers due to Ssangyong Motor's rehabilitation procedure application.

Ssangyong Motor applied for corporate rehabilitation procedures at the Seoul Bankruptcy Court on this day. This was due to continuous losses for 15 consecutive quarters, resulting in the inability to repay 165 billion KRW in loans borrowed from financial institutions.

The government plans to make efforts to resolve management difficulties for Ssangyong Motor's partner companies, focusing on related agencies.

First, through the utilization of policy finance programs by the Korea Development Bank and the Small and Medium Business Corporation, as well as loan maturity extensions, the government plans to provide maximum support for the financial difficulties of partner companies. Earlier in June, the government announced plans to promote financial support including guarantees and loan programs (6 types) worth 2 trillion KRW plus alpha for automobile partner companies with medium to low credit ratings, along with maturity extensions.

Additionally, the Ministry of Trade, Industry and Energy, along with the Gyeonggi and Chungnam Regional Small and Medium Business Administration offices, will operate a support team for partner companies to closely monitor the situation in the parts industry and provide tailored 1:1 solutions by assigning dedicated staff at regional offices to companies facing difficulties. The partner company support team includes the Financial Supervisory Service's Financial Difficulty Counseling Center, the Small and Medium Business Corporation, and the Korea Automobile Manufacturers Cooperative.

The government explained that Ssangyong Motor's rehabilitation procedure application is "not a typical rehabilitation procedure but an ARS (Autonomous Restructuring Support Program), where the direction of handling will be decided through consultations among creditors and other stakeholders over approximately three months." It added, "This rehabilitation procedure application was made based on the independent management judgment of Ssangyong Motor's management."

Furthermore, the government stated, "Despite the rehabilitation procedure application, negotiations for the sale of Ssangyong Motor are still ongoing," and expressed hope that "good results will be achieved 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.