Creditors of Ssangyong Motor to withdraw liquidation petition

PYEONGTAEK, South Korea, Aug. 7 (Yonhap) -- A number of the creditors of
Ssangyong Motor Co. said Friday they plan to withdraw their petition to early
liquidate the troubled carmaker, a day after an epic 77-day strike by fired
workers ended.

On Thursday, union leaders and the management of Ssangyong agreed on the number
of layoffs, ending violent clashes with hundreds of the laid-off workers who had
occupied part of the carmaker's only assembly plant since May 22.
"As the occupation ended, we will withdraw our petition on Monday," said Choi
Byung-hoon, who represents some 600 suppliers of Ssangyong, which owes 276
billion won (US$224.8 million) to the suppliers. They filed the petition on
Wednesday.
While the occupation peacefully ended, Ssangyong, the smallest carmaker in South
Korea, is facing an uphill battle for its survival.
Under bankruptcy protection since February, Ssangyong was required to submit its
turnaround plan by Sept. 15. If a bankruptcy court rejects the plan, Ssangyong
may be forced into liquidation.
The outlook for Ssangyong's survival remains bleak as the company would have
difficulty resuming production within weeks and winning sales amid its shattered
image from the strike, analysts say.
In the first six months of this year, sales by Ssangyong, which has an annual
production capacity of 200,000 units, plunged 73.9 percent from the same period
last year to 13,020 units. The months-long strike also cost Ssangyong 316 billion
won in lost production.
Shanghai Automotive still owns a 51 percent stake in Ssangyong, but the Chinese
parent lost management control after the carmaker entered bankruptcy protection.
(END)