Troubled South Korean automaker SsangYong is beginning to recover from a turbulent 23 months that included bankruptcy, a failed financial takeover and a court-ordered debt-repayment plan.
SsangYong’s darkest days may be over when the South Korean automaker announces it has repaid 299.4 billion won (AU$340 million) in debt it owes to its creditors, subcontractors and former parent company Mahindra.
Over the past 23 months, SsangYong’s global operations have been in financial turmoil as years of production and sales expectations have not been met.
In December 2020, Indian conglomerate Mahindra and Mahindra sold its 75 percent stake in SsangYong, causing the South Korean company to file for bankruptcy – it owed 315.3 billion won (then AU$357.7 million) in overdue debt several financial institutions.
In October 2021, a consortium led by South Korean electric bus and truck maker Edison Motors announced plans to acquire SsangYong for 304.8 billion won (AU$348 million).
However, Edison Motors’ proposed acquisition of SsangYong stalled in March this year when the group defaulted on its final payment of 274.3 billion won (AU$311 million) – although the automaker reportedly returned the bail in amount of US$25 million (AU$33.2 million).
In June 2022, South Korean chemical and steel company KG Group submitted an 800 billion won ($907.7 million) offer for SsangYong, which was eventually approved by South Korea’s Seoul Bankruptcy Court in August — subject to certain conditions.
As reported by the South Korean publication The Korea TimesSsangYong’s “rehabilitation plan” included repaying 237 billion won (AU$269 million) to its creditors, 55 billion won (AU$62 million) to subcontractors and 7.4 billion won (AU$8.4 million) to Mahindra and Mahindra.
While SsangYong had to repay its creditors in full, it only had to repay a fraction of what it owed to its subcontractors (13.97 percent of 393.8 billion won) and Mahindra (5.43 percent of 136.3 billion won).
This week, SsangYong announced that the restructuring plan for its 299.4 billion won (AU$340 million) debt was completed on November 11, with the South Korean company now focusing on the future.
In a media statement, the automaker said it “now plans to accelerate its early management normalization by growing sales and turning a profit quickly.”
SsangYong’s sales approach will be led by the upcoming Torres SUV and the “U100” electric vehicle – although the latter has yet to go into production.
Between January and October 2022, SsangYong sold 2,967 vehicles in Australia – just 11 fewer than the annual record of 2,978 set last year.
The Musso-Ute accounts for a majority of SsangYong’s local sales, with 1,336 examples sold year-to-date eclipsing the Rexton (1,176 sold) and Korando (455 sold).
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