Mahindra’s arm SsangYong Motor files for bankruptcy after missing loan repayment: All details

M&M stated that the Seoul Bankruptcy Court will be deliberating and reviewing the application and relevant documents submitted by SYMC to determine whether or not the court will commence the restructuring process of SYMC.

By:December 22, 2020 2:56 PM

 

Mahindra & Mahindra (M&M) has said that its loss-making South Korean arm SsangYong Motor Company (SYMC) has now filed for bankruptcy. M&M said in a regulatory filing that the SYMC has filed an application for the commencement of rehabilitation procedure with the Seoul Bankruptcy Court under the Debtor Rehabilitation and Bankruptcy Act of South Korea. The troubled automaker has also applied for an autonomous restructuring support (ARS) programme which is a court designed process, it added. M&M said that if the court approves the ARS, SYMC will continue to function under the supervision of its board and will negotiate with the stakeholders to reach an understanding about a revival package which may include equity and debt financing and other related actions. However, some of its decisions will be subject to Court approval, it noted.

M&M also stated that the Seoul Bankruptcy Court will be deliberating and reviewing the application and relevant documents submitted by SYMC to determine whether or not the court will commence the restructuring process of SYMC. Last week, M&M had informed the bourses that SYMC has missed repayments of loans aggregating to 60 billion KRW that translates to around Rs 408 crore. The Korean automaker has outstanding loans aggregating to 100 billion Korean Won or close to Rs 680 crore.

In April this year, M&M board rejected a proposal to inject any fresh equity into SYMC. The Mumbai-based auto major had acquired the loss-making SsangYong in 2010 but failed to turn it around since then despite several attempts. M&M holds nearly 75 percent in the Korean company now and has since invested over USD 110 million. SsangYong has been struggling with deteriorating earnings since 2017 when it slipped into the red with a net loss of 66 billion wons as against a net profit of 58 billion wons in 2016. In 2018, its net loss rose to 62 billion wons and then ballooned to 341 billion wons in 2019.

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