Ssangyong Motor Faces Day of Destiny but Fails to Present Clear Measures

Ssangyong Motor, standing at the crossroads of life and death, has reached a fateful day. Despite holding the regular shareholders' meeting amid the threat of delisting due to a disclaimer of opinion, the company failed to present any special alternatives. The day also coincides with the deadline for submitting the Letter of Intent (LOI) requested by the court, raising the possibility that the decision on court receivership may be made.

On the 31st, Ssangyong Motor held its regular shareholders' meeting from 9 a.m. at its headquarters in Pyeongtaek, Gyeonggi Province. The atmosphere at Ssangyong Motor's headquarters that morning was quiet but tense. Unlike usual shareholders' meetings, Ssangyong Motor officials controlled access so that anyone who was not a shareholder could not enter the building where the meeting was held. A Ssangyong Motor official explained, "The shareholders' meeting room is inside the headquarters, and due to the spread of COVID-19, anyone who is not a shareholder cannot enter the building where the meeting is held."

The agenda items approved that day included the financial statements and consolidated financial statements, and approval of the directors' remuneration limits. There were no special matters related to delisting or additional investment. However, about 50 shareholders, including small shareholders, attended the meeting and expressed concerns about delisting. One individual shareholder attending the meeting said, "I invested with trust, but the company's situation has deteriorated so much that I came to check the situation myself." Shareholders continued to ask questions about HAAH's investment decision and the possibility of delisting, but the company reportedly failed to provide clear solutions.

Earlier, Ssangyong Motor faced the risk of delisting after receiving a disclaimer of opinion from Samjong Accounting Corporation on its 2020 fiscal year audit report. Based on last year's consolidated financial statements, Ssangyong Motor's capital impairment ratio was 111.8%, indicating a state of complete capital erosion.

Moreover, Ssangyong Motor is struggling to enter the P-Plan (preliminary rehabilitation plan) due to delays in investment decisions by HAAH Automotive. Previously, the Seoul Bankruptcy Court requested Ssangyong Motor to submit HAAH's Letter of Intent by the deadline for correction orders, which is today. HAAH has also announced that it will send the Letter of Intent by today. The court plans to proceed with a process to gather creditors' opinions even after the correction order deadline passes, so it is unlikely that court receivership will begin immediately. Therefore, HAAH is expected to respond with the Letter of Intent to Ssangyong Motor on the 1st of next month, calculated based on U.S. local time on the 31st. After receiving the Letter of Intent, Ssangyong Motor plans to review it, submit it to the court, and request a postponement of the rehabilitation commencement decision.

The contents of the Letter of Intent will also be an important basis for the court's decision on postponement. If HAAH Automotive only expresses an intention to invest without including substantive details such as the timing of the investment contract or specific investment plans, the court cannot indefinitely delay the rehabilitation commencement decision based solely on that and wait endlessly for the P-Plan to begin. Industry insiders expect that the court may set a date next month and notify that if the issue is not resolved by then, court receivership will commence. Additionally, since the deadline for Ssangyong Motor's objection to delisting is the 13th of next month, it is anticipated that the investment contract with HAAH Automotive must be concluded before the objection deadline.

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