Korean carmaker Ssangyong filed for insolvency proceedings in Seoul court earlier this week. The reason is that it is unable to repay its debts, which amount to sixty billion won, here about 1.2 billion crowns. In addition, the company said it had requested a Korean equivalent of the Czech moratorium, which should give it three months to raise money to pay off its liabilities.
“Ssangyong Motor has applied for compulsory administration due to the fact that it expects a significant reduction in its operations due to non-payment of its obligations. The last installment was to go on December 14. Among the largest creditors of the company are, according to Automotive News Europe Bank of America (30 billion won), JPMorgan & Chase (20 billion) and BNP Paribas (10 billion).
The Korean carmaker is complicated by the repayment of liabilities, the fall in sales, which fell between January and November this year by 20 percent year on year to 96,825 vehicles.
For the current owner, the Indian concern Mahindra & Mahindra with a 75% share, it must be a bitter sobriety.
The history of the Ssangyong (Korean double dragon), which specializes in such a popular SUV, is literally intertwined with financial difficulties. During the Asian financial crisis, Daewoo Motors bought the carmaker from the Ssangyong Group conglomerate of the same name in 1997 to sell it to the Chinese SAIC concern in just three years due to its own financial problems. Under his ownership, however, the company came under forced administration once in January 2009. In August 2010, the company was rescued from India by Mahindra & Mahindra.
He tried to save the company, bet on new models, such as the compact Tivoli crossover, and in 2016, even after nine years, Ssangyong was able to get into the black, a profit. In 2018 and 2019, when the brand returned to the Czech market, however, the carmaker was already back at a loss and its situation was exacerbated by the aforementioned drop in sales in this year’s coronavirus year.
Therefore, the rescue plan did not work out, and already in June of this year, the Mahindra & Mahindra concern announced that it was ready to sell Ssangyong. According to the South Korean Ministry of Commerce, negotiations on the sale of an almost 75-percent stake in the Indian company are still ongoing, and the request for compulsory administration does not change that.
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