ID :
88166
Fri, 11/06/2009 - 09:31
Auther :
Shortlink :
https://www.oananews.org//node/88166
The shortlink copeid
Struggling Ssangyong awaits court's ruling on survival plan
SEOUL, Nov. 6 (Yonhap) -- A South Korean court is set to make a decision Friday on whether to approve a turnaround plan by beleaguered Ssangyong Motor Co., which has been under bankruptcy protection since February, company officials said.
Ssangyong, majority owned by China's Shanghai Automotive Industry Corp.,
submitted the plan to the Seoul Central District Court last month, saying it
would cut the Chinese parent's holding to 11.2 percent from 51 percent and repay
its 1.23 trillion won (US$1.04 billion) in debt over the next 10 years.
The plan also calls for Ssangyong, the smallest carmaker in South Korea, to write
off some of its debts. Unless the court accepts the plan, Ssangyong will likely
be liquidated.
Chung Mu-young, a spokesman at Ssangyong, said the approval hinges on whether
foreign creditors agree to the rehabilitation plan.
"Whether or not the foreign creditors agreed on the plan is key for the court's
decision," Chung said. The spokesman added the court may delay a decision if
there is a disagreement among the foreign creditors.
Ssangyong became the first major corporate victim in South Korea of the global
economic crisis, as the slump hit sales of new cars last year.
But some critics have accused Shanghai Automotive of failing to live up to its
investment plan and "stealing" technology from Ssangyong, which specializes in
sport-utility vehicles.
Ssangyong's woes deepened in summer as hundreds of dismissed workers occupied the
company's only plant for more than two months to protest massive layoffs. As part
of the turnaround plan, Ssangyong slashed about 30 percent of its workforce, or
2,130 jobs.
If the court approves the turnaround plan, Ssangyong's court-appointed managers
say they would sell most of Shanghai Motor's stake to other foreign investors to
survive on its own.
But many analysts say Ssangyong has a long way to go to revive its business
because of its gas-guzzler line-up and tattered image from the strike.
In the first half of this year, Ssangyong's net loss reached 443 billion won.
Sales also plunged 66 percent to 455 billion won with its operating loss totaling
153 billion won.
Shares of Ssangyong Motor jumped 10.93 percent to 3,095 won as of 9:21 a.m. in
Seoul on speculation that the court may accept the company's turnaround plan.
(END)
Ssangyong, majority owned by China's Shanghai Automotive Industry Corp.,
submitted the plan to the Seoul Central District Court last month, saying it
would cut the Chinese parent's holding to 11.2 percent from 51 percent and repay
its 1.23 trillion won (US$1.04 billion) in debt over the next 10 years.
The plan also calls for Ssangyong, the smallest carmaker in South Korea, to write
off some of its debts. Unless the court accepts the plan, Ssangyong will likely
be liquidated.
Chung Mu-young, a spokesman at Ssangyong, said the approval hinges on whether
foreign creditors agree to the rehabilitation plan.
"Whether or not the foreign creditors agreed on the plan is key for the court's
decision," Chung said. The spokesman added the court may delay a decision if
there is a disagreement among the foreign creditors.
Ssangyong became the first major corporate victim in South Korea of the global
economic crisis, as the slump hit sales of new cars last year.
But some critics have accused Shanghai Automotive of failing to live up to its
investment plan and "stealing" technology from Ssangyong, which specializes in
sport-utility vehicles.
Ssangyong's woes deepened in summer as hundreds of dismissed workers occupied the
company's only plant for more than two months to protest massive layoffs. As part
of the turnaround plan, Ssangyong slashed about 30 percent of its workforce, or
2,130 jobs.
If the court approves the turnaround plan, Ssangyong's court-appointed managers
say they would sell most of Shanghai Motor's stake to other foreign investors to
survive on its own.
But many analysts say Ssangyong has a long way to go to revive its business
because of its gas-guzzler line-up and tattered image from the strike.
In the first half of this year, Ssangyong's net loss reached 443 billion won.
Sales also plunged 66 percent to 455 billion won with its operating loss totaling
153 billion won.
Shares of Ssangyong Motor jumped 10.93 percent to 3,095 won as of 9:21 a.m. in
Seoul on speculation that the court may accept the company's turnaround plan.
(END)
