(LEAD) Ssangyong engaged in talks to find new owner: source

(ATTN: UPDATES with more details from para 2)
INCHEON, Oct. 18 (Yonhap) -- South Korea's smallest carmaker is engaged in talks
to find a new owner that could help revive the embattled company, which filed for
bankruptcy protection earlier in the year, a company source said.

Lee Yoo-il, one of two court-appointed managers at Ssangyong, told reporters on
Yeongjong Island in Incheon west of Seoul that the company is holding potential
mergers and acquisitions talks with a few interested parties from abroad.
"The companies that shown interest have been slow to make a presence in the Asian
market, and do not have conflicting automobile manufacturing platforms with
Ssangyong that can help positive synergy in future development strategies," he
said at the unveiling ceremony for the company's new luxury sedan.
Without going into detail, he said that Ssangyong may be able to select a firm to
coordinate sales in late November or early December, and hinted there are
investors willing to give money to keep the carmaker afloat while acknowledging
that negotiations have not reached the final stage.
The managers said speculation that Volkswagen may be trying to buy the company is
unfounded and added that the possible buyer is not from Russia or China.
Ssangyong makes luxury sedans and sports utility vehicles, which have been hit
the hardest by the economic downturn.
He added that while Ssangyong has been hurt by a labor strike, it is aiming to
increase production to 85,000 vehicles in 2010, up from 69,000 units estimated by
PricewaterhouseCoopers Korea earlier in the year.
The carmaker needs to sell at least 72,000 units per year to break even.
Ssangyong claimed that it will release several new models in 2010, including the
C200 that is undergoing final design changes. It added that efforts are underway
to build a small-size electric vehicle and hybrid powered car within the next
five years.
Ssangyong entered bankruptcy protection in February after Shanghai Automotive
abandoned its loss-making affiliate. The Chinese company owns a 51 percent stake
in Ssangyong, whose total debt is valued at around 1.23 trillion won (US$1.06
billion).
The company asked the bankruptcy court last month to cancel most shares owned by
its Chinese parent as part of its turnaround plan, and submitted a proposal to
convert 393 billion won of its debts into new shares. It agreed to dismiss 2,646
workers, or 36 percent of its workforce, to reduce cost of production.
The court plans to hold a meeting with creditors on Nov. 6 to review all options
that could determine the future of the company.
yonngong@yna.co.kr
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