Ssangyong Motor says auditor may favor survival over liquidation

GOYANG, South Korea, April 2 (Yonhap) -- A court-appointed manager for Ssangyong
Motor Co., South Korea's smallest automaker, said Thursday an accounting firm is
likely to favor its survival over liquidation to recoup debts.
Abandoned by its Chinese parent Shanghai Automotive Industry Corp. (SAIC),
Ssangyong entered court receivership in February amid collapsing sales and
dwindling cash reserves.
The auditor, Samjong KPMG Inc. plans to complete a due diligence of Ssangyong's
viability on May 6. If the automaker is deemed unviable, creditors will liquidate
it.
"The auditor may judge that Ssangyong Motor's survival would be more valuable
than its liquidation," Lee Yoo-il, the manager, said on the sidelines of the 2009
Seoul Motor Show.
"That's why I came here to show off Ssangyong Motor vehicles," Lee said.
Ssangyong, which has an annual production capacity of 200,000 vehicles, posted a
net loss of 709.7 billion won (US$521.3 million) in 2008 on sales of 2.5 trillion
won, down 20 percent from a year earlier.
Last month, Ssangyong's vehicle sales plunged 75.7 percent to 2,458 units as
consumers shunned purchase of the potentially bankrupt company's vehicles.
In the first three months of this year, Ssangyong's sales dived 76 percent to
6,471 units.
On Tuesday, about 1,800 minority shareholders of Ssangyong sued 13 current and
former executives at SAIC, accusing the Chinese parent of using its position to
take Ssangyong's technology at a below-market price.
With the bankruptcy protection, SAIC, which still holds a 51-percent stake in
Ssangyong, relinquished its control of the South Korean carmaker.
(END)