EY Hanyoung Accounting Corporation "Ssangyong Motor Going Concern Value 620 Billion Won"
Submission of Ssangyong Motor Investigation Report to the Rehabilitation Court
[Asia Economy Reporter Hyungsoo Park] The going concern value of Ssangyong Motor, which is undergoing corporate rehabilitation procedures, was found to be lower than its liquidation value.
According to industry sources and the court on the 30th, the going concern value was estimated at 620 billion KRW in the final investigation report submitted by EY Han Young Accounting Corporation, the investigator of Ssangyong Motor. This was 360 billion KRW lower than the liquidation value of 980 billion KRW.
The report diagnosed the cause of Ssangyong Motor's deteriorating management as continuous operating losses and sluggish sales.
Regarding the investigation report, Ssangyong Motor stated in a press release the day before, "Regardless of the investigation results after the decision to commence rehabilitation procedures, the M&A promotion has been decided," emphasizing that "comparing the going concern value and liquidation value at the stage of proceeding with M&A before approval is meaningless."
However, the M&A industry judged that the investigation results would affect the sale process. Earlier, Ssangyong Motor and EY Han Young Accounting Corporation, the lead manager for the sale, announced the Ssangyong Motor M&A on the 28th and decided to accept letters of intent and confidentiality agreements until the 30th of next month.
Ssangyong Motor explained, "We plan to prepare early management normalization measures through consultations with potential buyers," and "We intend to dispel concerns through smooth implementation of self-rescue plans and normal production and sales activities."
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It remains uncertain whether finding a new owner for Ssangyong Motor will succeed. Considering public claims of about 390 billion KRW and subsequent investment costs, the acquisition funds are expected to be in the range of 800 billion to 1 trillion KRW. No acquisition candidates with sufficient financial capability have yet appeared.
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