Ssangyong Motor Submits Delisting Appeal... Exchange to Decide on Granting Improvement Period

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor, which is facing court receivership due to a liquidity crisis, submitted an objection to delisting to the Korea Exchange on the 13th.

The Korea Exchange's KOSPI Market Division announced on the same day, "Ssangyong Motor has submitted an objection to delisting," and added, "We plan to decide on granting an improvement period in accordance with Article 25, Paragraph 5 of the KOSPI Listing Regulations."

Earlier, Ssangyong Motor faced the risk of delisting after receiving a disclaimer of opinion on its audit report for the last fiscal year from Samjong Accounting Corporation. The Exchange usually delists common stocks of companies that receive an adverse or disclaimer audit opinion on their individual or consolidated financial statements for the recent fiscal year. However, if the auditor submits a statement proving that the issue has been resolved before the start of the orderly trading period, the delisting is postponed.

Accordingly, Ssangyong Motor recently conducted a revaluation of assets on 165 plots including its Pyeongtaek headquarters to improve its financial structure. As a result, the book value of the land on the consolidated financial statements at the end of last year was KRW 402.57 billion (after deducting government subsidies), but after revaluation, it increased to KRW 681.37 billion, generating a gain of KRW 278.8 billion.

Consequently, the company also escaped from a state of complete capital erosion. As of the end of last year, Ssangyong Motor’s total equity was negative KRW 88.1 billion, with a capital erosion ratio of 111.8%, but after this revaluation, the capital increased to KRW 190.7 billion.

Meanwhile, the Seoul Bankruptcy Court is expected to decide as early as this week whether to commence corporate rehabilitation proceedings for Ssangyong Motor. To appoint a manager, the court has designated Yong-won Jeong, Ssangyong Motor’s Head of Planning and Management Division (Executive Director), as the sole candidate and has consulted the Supreme Court’s Rehabilitation and Bankruptcy Committee and the creditors’ council for their opinions.

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