Court delays decision on Ssangyong's turnaround plan

(ATTN: UPDATES with court's ruling; CHANGES headline; TRIMS)
By Kim Deok-hyun
SEOUL, Nov. 6 (Yonhap) -- A South Korean bankruptcy court delayed Friday its
decision on whether to approve a turnaround plan by Ssangyong Motor Co. because a
majority of foreign bondholders voted against it.
The Seoul Central District Court will convene a meeting Dec. 11 with the
stakeholders of Ssangyong to vote again on a revised turnaround plan, according
to company officials.
Ssangyong, majority-owned by China's Shanghai Automotive Industry Corp.,
submitted the plan to the court to 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.
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 over the 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.
(END)