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SsangYong saved! Korean court greenlights rescue plan

The Seoul Bankruptcy Court has reportedly approved the latest rescue plan for troubled Korean car-maker SsangYong – paving the way for some overdue financial stability.

SsangYong currently operates a full factory subsidiary operation in Australia, and sells the Musso ute, and the Rexton and Korando SUVs. It’s also working on launching the edgy Torres SUV and an electric version of the smaller Korando in 2023.

The Yonhap news agency reports SsangYong’s debt-settling plan – submitted to the Court in late July – had now met with “overwhelming” support from creditors and other related parties.

A consortium led by chemical and steel conglomerate KG Group has the green light to buy up a majority stake (reportedly 61 per cent) in the perennially debt-laden car-maker, which nevertheless has some new and exciting products on the way.

The two companies have a connection. KG Steel, part of KG Group, previously supplied components to SsangYong.

The reported cost, according to The Korea Herald, was 950 billion won ($A1.026 billion). The Korean market regulator said the deal would not hamper competition in related markets, including cold rolled steel sheets and car-making.

That price is more than three times the 304.8 billion won that Korean electric bus manufacturer Edison Motors had agreed to pay for SsangYong, before its deal was scuppered.

SsangYong Motor has been under court receivership since April 2021 as its parent company Mahindra & Mahindra failed to find a new investor amid the pandemic and financial difficulties.

Yonhap reports SsangYong could break out of its court-led debt rescheduling program within this year – if all the planned debt payments are completed as scheduled. Debts not settled in cash will reportedly be converted into equity.

The court-appointed manager for SsangYong Motor Chung Yong-won stated: “We will exert all efforts to repay all to our creditors, stakeholders, and customers who believed us by making the company a sustainable one.”

KG Chemical CEO Kwak Jae-sun added: “It is with great pleasure that the court approves the rehabilitation plan and I sincerely appreciate all SsangYong employees who tried their best during the process.

“KG will fully support SsangYong for its business normalisation and regain trust in the market.”

SsangYong’s home life has been troubled for years, and it never seems to have a stable parent for long.

Daewoo bought a controlling stake in the company in 1997, only to offload it in 2000 as it experienced perilous financial woes of its own.

It endured a tumultuous few years under Chinese ownership, with SAIC Motor acquiring 51 per cent in 2004 but walking away in 2009 and leaving it in receivership.

Mahindra & Mahindra was the next parent to adopt SsangYong, acquiring a controlling stake of 70 per cent for 523 billion won in 2011.

MORE: SsangYong, the history of a brand with an uncertain future
MORE: SsangYong Torres SUV a hit at home, Aussie launch pushed back
MORE: SsangYong could be acquired by Korean steel company – report
MORE: SsangYong attracts four bidders following acquisition deal collapse – report
MORE: SsangYong, the history of a brand with an uncertain future
MORE: Edison Motors asks court to save SsangYong acquisition deal – report
MORE: SsangYong suitor given court’s approval for purchase – report

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