KDB to offer 130 bln won in fresh loans to Ssangyong

SEOUL, Aug. 12 (Yonhap) -- South Korea's state-run Korea Development Bank (KDB) said Wednesday it will provide financial aid worth 130 billion won (US$104 million) to help ailing Ssangyong Motor Co. normalize its operations.

South Korea's smallest automaker, which has been under bankruptcy protection
since February, has asked for emergency funding of up to 150 billion won from KDB
to cover its restructuring expenditures and develop a new compact sport utility
vehicle. But KDB has rejected its fund request for vehicle development.
"The bank has decided to provide funds to facilitate the company's restructuring
effort, including severance payments," the lender said. "We will take its
manufacturing facilities as collateral for the new loan." The carmaker owes KDB
240 billion won.
On Thursday, the automaker's union and management agreed on the number of
layoffs, ending a 77-day strike that was marred with violent clashes.
Under court protection, Ssangyong was required to submit its turnaround plan by
Sept. 15. If a bankruptcy court rejects the plan, it may be forced into
liquidation.