ID :
40897
Thu, 01/15/2009 - 21:08
Auther :
Shortlink :
https://www.oananews.org//node/40897
The shortlink copeid
Former Ssangyong Motor CEO apologizes to employees
SEOUL, Jan. 15 (Yonhap) -- The former chief executive of Ssangyong Motor Co.
apologized to employees Thursday for the crisis-hit automaker's application for
court receivership.
Ssangyong, the South Korean unit of China's Shanghai Automotive Industry Corp.
(SAIC), has halted production at its only assembly plant indefinitely since
applying for receivership last week, which is similar to bankruptcy protection.
"I would like to express my deepest apologies to employees and their family
members for applying for court receivership," Choi Hyung-tak, the ex-CEO of
Ssangyong who resigned last week, wrote in his letter to employees.
"Also, I feel an overall responsibility for making the difficult decision amid a
liquidity crisis," Choi said. He added that he is confident, however, that
Ssangyong could overcome the current crisis.
Some observers have called Ssangyong the South Korean auto industry's first
high-profile victim of the global economic slump. The automaker employs some
7,100 workers.
Since early last year, Ssangyong has been plagued by slumping sales and tight
credit.
Financial regulators and creditors, led by state-run Korea Development Bank, have
urged SAIC to help rescue the ailing carkmaker. But SAIC has shown little
interest in bailing out its affiliate.
If a Seoul court accepts the application for receivership, SAIC will lose its
management control but retain its 51-percent stake in Ssangyong.
SAIC bought the Ssangyong stake for US$500 million in 2004, but the stock's value
has since sank to about 60 billion won (US$43.4 million).
On Monday, the court froze debts and obligations at Ssangyong ahead of its
decision on whether to grant receivership early next month.
Even if the court accepts the receivership, Ssangyong faces a rough road ahead in
normalizing its operations due to battered auto markets at home and abroad,
analysts say.
Creditors say Ssangyong has only 38 billion won in cash, which is enough for the
carmaker to continue operations for just one month.
Ssangyong has debts amounting to 800 billion won at the end of last year, with
150 billion won due to mature in April, according to company officials.
(END)
apologized to employees Thursday for the crisis-hit automaker's application for
court receivership.
Ssangyong, the South Korean unit of China's Shanghai Automotive Industry Corp.
(SAIC), has halted production at its only assembly plant indefinitely since
applying for receivership last week, which is similar to bankruptcy protection.
"I would like to express my deepest apologies to employees and their family
members for applying for court receivership," Choi Hyung-tak, the ex-CEO of
Ssangyong who resigned last week, wrote in his letter to employees.
"Also, I feel an overall responsibility for making the difficult decision amid a
liquidity crisis," Choi said. He added that he is confident, however, that
Ssangyong could overcome the current crisis.
Some observers have called Ssangyong the South Korean auto industry's first
high-profile victim of the global economic slump. The automaker employs some
7,100 workers.
Since early last year, Ssangyong has been plagued by slumping sales and tight
credit.
Financial regulators and creditors, led by state-run Korea Development Bank, have
urged SAIC to help rescue the ailing carkmaker. But SAIC has shown little
interest in bailing out its affiliate.
If a Seoul court accepts the application for receivership, SAIC will lose its
management control but retain its 51-percent stake in Ssangyong.
SAIC bought the Ssangyong stake for US$500 million in 2004, but the stock's value
has since sank to about 60 billion won (US$43.4 million).
On Monday, the court froze debts and obligations at Ssangyong ahead of its
decision on whether to grant receivership early next month.
Even if the court accepts the receivership, Ssangyong faces a rough road ahead in
normalizing its operations due to battered auto markets at home and abroad,
analysts say.
Creditors say Ssangyong has only 38 billion won in cash, which is enough for the
carmaker to continue operations for just one month.
Ssangyong has debts amounting to 800 billion won at the end of last year, with
150 billion won due to mature in April, according to company officials.
(END)
