(LEAD) Creditors of Ssangyong Motor to withdraw liquidation petition

(ATTN: ADDS Ssanyong seeking financial aid in paras 6-8)
PYEONGTAEK, South Korea, Aug. 7 (Yonhap) -- A number of Ssangyong Motor Co.
creditors said Friday they plan to withdraw their petition for an early
liquidation of 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 fired workers who had
occupied part of the carmaker's only assembly plant since May 22.
"As the occupation has ended, we will withdraw our petition on Monday," said Choi
Byung-hoon, who represents some 600 suppliers of Ssangyong that are owed a total
of 276 billion won (US$224.8 million) by the carmaker. The petition was filed on
Wednesday.
While the occupation ended peacefully, South Korea's smallest carmaker still
faces 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.
Meanwhile, Ssangyong has asked for emergency funding from South Korea's state-run
Korea Development Bank, a high-ranking official at the bank said on the same day.

"Ssangyong Motor is seeking a loan of 100-150 billion won for its restructuring
expenditures, including severance payments," the bank official said on condition
of anonymity.
KDB, the main creditor of Ssangyong, plans to start talks with the automaker's
court-appointed managers to discuss the request, according to the official.
Ssangyong owes 240 billion won to KDB.
Still, the prospects for Ssangyong's survival remain bleak as the company will
have difficulty resuming production within weeks and winning sales amid its
shattered image following 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)