Ssangyong Motor to Restart Factory with Existing Inventory... Partner Meeting to Resume Deliveries

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor, which experienced production disruptions throughout this month due to delivery refusals from partner companies, resumed production on the 16th.

Ssangyong Motor restarted its production line from this day by utilizing the inventory parts it had previously secured. The production lines resuming operation are Line 1 and Line 3 at the Pyeongtaek plant.

Earlier, on the 29th of last month, Ssangyong Motor deferred payment on promissory notes worth 200 billion KRW that had matured, and some parts suppliers opposed this by refusing to deliver parts.

As a result, Ssangyong Motor experienced production disruptions on the 1st and 2nd of this month and completely halted factory operations from the 3rd to 5th and from the 8th to 10th. During this period, Ssangyong Motor contacted the suppliers who refused delivery to request resumption, and some partner companies agreed to resume deliveries.

However, if the suppliers who have not yet resumed supply continue to refuse delivery, production could be halted again. Ssangyong Motor stated, "We are continuously requesting cooperation to have the partners resume deliveries."

For Ssangyong Motor to normalize the company by submitting a pre-rehabilitation plan (P-Plan) within this month, it is essential that partner companies resume deliveries. This is because the court must determine that Ssangyong Motor’s production and sales are proceeding smoothly to review and approve the rehabilitation plan included in the P-Plan.

Accordingly, Ssangyong Motor will hold a briefing session with the Ssangyong Motor Partner Emergency Response Committee near the Pyeongtaek plant this afternoon to discuss countermeasures. Ssangyong Motor and the Emergency Response Committee are expected to have broad discussions on current issues such as production normalization plans, progress of the sale, and the status of the P-Plan during the briefing.

The Emergency Response Committee is also expected to support persuading creditors for the submission of the P-Plan. For the P-Plan to be approved by the court, consent is required from secured creditors such as the Korea Development Bank (three-fourths), unsecured creditors (partner companies) (two-thirds), and shareholders (one-half).

In addition, the Emergency Response Committee plans to explore ways to jointly persuade some partner companies that continue to hold negative positions on resuming deliveries together with Ssangyong Motor during the session.

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