Ssangyong Motor, Going Concern Value of 620 Billion KRW... Han Young Accounting Firm Submits Investigation Report

[Asia Economy Reporter Ki-min Lee] SsangYong Motor's going concern value has been assessed at 620 billion KRW, which is 360 billion KRW lower than its liquidation value. SsangYong Motor plans to revive the company through a pre-approval merger and acquisition (M&A), as the court recently extended the deadline for submitting the rehabilitation plan to September 1 by two months.

According to industry sources and the court on the 30th, EY Han Young Accounting Corporation, the investigation committee for SsangYong Motor, submitted the final investigation report containing these details to the Seoul Rehabilitation Court on the same day.

In the investigation report, SsangYong Motor's liquidation value was estimated at 980 billion KRW. In contrast, the going concern value, which considers future earnings if SsangYong Motor continues operations, was valued at approximately 620 billion KRW. EY Han Young Accounting Corporation, the investigation committee, diagnosed the cause of SsangYong Motor's deteriorating management as continuous operating losses and sluggish sales, noting in the report that "there are difficulties in continuous operations due to a lack of funds."

On the other hand, SsangYong Motor stated that comparing the going concern value and liquidation value at this stage is meaningless and intends to proceed with the M&A as planned.

Earlier, SsangYong Motor and the lead sales agent, EY Han Young Accounting Corporation, 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.

Jeong Yong-won, the court-appointed manager, and others reportedly met with the trade creditors the previous day to explain the situation and requested cooperation for the development of the mid-size SUV 'J100' (project name), scheduled for release next year. They also plan to secure funds based on sales of the first electric vehicle Korando e-Motion, which will be launched in Europe this October. The trade creditors are expected to appeal soon to the government and the Blue House for support in parts payments and collateral loans for SsangYong Motor.

However, challenges are still expected until the M&A of SsangYong Motor is finalized. Considering public interest bonds worth 380 billion KRW and investment costs, the acquisition price is expected to exceed 800 billion KRW, but no financially capable acquisition candidates have emerged.

Currently, besides HAAH Automotive, the previous leading investor, domestic electric bus manufacturer Edison Motors, electric vehicle company K-pop Motors, and private equity affiliate Park Seok-jeon & Company have expressed acquisition intentions. There is also a possibility of participation from one company each from the U.S. and China.

However, HAAH Automotive is reportedly facing recent management difficulties, and other acquisition candidates have raised doubts about their financial mobilization capabilities and acquisition intentions.

An industry insider said, "To save SsangYong Motor, an acquisition candidate with sales power and financial strength must appear," adding, "In addition, institutions like the Korea Development Bank need to provide additional loans for normalization to be possible."

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