ID :
88266
Fri, 11/06/2009 - 19:07
Auther :
Shortlink :
https://www.oananews.org//node/88266
The shortlink copeid
Struggling Ssangyong awaits court's ruling on survival plan
(ATTN: UPDATES with bondholders and shareholders voting on turnaround plan in first
two paras, closing share price in final para)
SEOUL, Nov. 6 (Yonhap) -- Major bond and shareholders of Ssangyong Motor Co.
began voting Friday on a turnaround plan presented by the beleaguered carmaker as
it was awaiting a ruling by a local bankruptcy court on whether it will face
liquidation, company officials said.
To win support from the court, more than three-quarters of bondholders and half
of shareholders must vote to approve the plan for a capital reduction and
debt-to-equity swap, according to the officials. Ssangyong, majority owned by
China's Shanghai Automotive Industry Corp., has been under bankruptcy protection
since February.
Ssangyong 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 ruling 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.
But many analysts say Ssangyong has a long way to go to revive its business
because of its line-up of gas-guzzlers and its 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 losses
totaling 153 billion won.
The court's decision was set to be made after stock markets closed. Shares of
Ssangyong Motor surged 14.87 percent to close at 3,205 won on the Seoul bourse on
speculation that the court may accept the company's turnaround plan.
(END)
two paras, closing share price in final para)
SEOUL, Nov. 6 (Yonhap) -- Major bond and shareholders of Ssangyong Motor Co.
began voting Friday on a turnaround plan presented by the beleaguered carmaker as
it was awaiting a ruling by a local bankruptcy court on whether it will face
liquidation, company officials said.
To win support from the court, more than three-quarters of bondholders and half
of shareholders must vote to approve the plan for a capital reduction and
debt-to-equity swap, according to the officials. Ssangyong, majority owned by
China's Shanghai Automotive Industry Corp., has been under bankruptcy protection
since February.
Ssangyong 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 ruling 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.
But many analysts say Ssangyong has a long way to go to revive its business
because of its line-up of gas-guzzlers and its 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 losses
totaling 153 billion won.
The court's decision was set to be made after stock markets closed. Shares of
Ssangyong Motor surged 14.87 percent to close at 3,205 won on the Seoul bourse on
speculation that the court may accept the company's turnaround plan.
(END)
