San: "We Have Never Been Notified to Stop Negotiations for Ssangyong Motor Sale"

Main Gate of Ssangyong Motor Pyeongtaek Plant, Pyeongtaek-si, Gyeonggi-do
[Image Source=Yonhap News]

[Asia Economy Reporter Kim Heung-soon] The Korea Development Bank (KDB) announced on the 27th that it has not been notified by any negotiation party about the suspension of the sale negotiations for Ssangyong Motor's shares.

This statement was made to draw a line after rumors surfaced that the investor, U.S. automobile distributor HAAH Automotive, had failed in sale negotiations with Ssangyong's major shareholder, India's Mahindra, and had informed the creditors of the suspension of negotiations.

The four-party consultative body consisting of Ssangyong Motor, the main creditor bank KDB, Mahindra, and HAAH Automotive failed to reach a conclusion by the tentative negotiation deadline set on the 22nd. The decisive factor for the failure of the agreement was reported to be the conflict of opinions between Mahindra and HAAH Automotive in the final stages of negotiation. Mahindra acquired Ssangyong Motor in 2011 and currently holds a 75% stake. The four-party consultative body is currently inactive.

Considering the time required for the share sale process and capital injection, as well as the March shareholders' meeting and last year's audit report submission deadline, the end of this month is effectively the final 'deadline' for negotiations, but the outlook for reaching an agreement remains uncertain.

Ssangyong Motor has a promissory note maturing on the 29th worth between 180 billion and 200 billion KRW. The Ssangyong Motor Cooperative estimates that unpaid delivery payments since October last year exceed 500 billion KRW.

Ssangyong Motor filed for corporate rehabilitation on December 21 last year due to liquidity crisis. The court has accepted Ssangyong Motor's Autonomous Restructuring Support (ARS) program, and the decision to commence rehabilitation proceedings has been deferred until February 28.

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