ID :
93962
Wed, 12/09/2009 - 13:11
Auther :
Shortlink :
https://www.oananews.org//node/93962
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Ssangyong Motor may again fail to win creditors' support
SEOUL, Dec. 9 (Yonhap) -- Foreign creditors of Ssangyong Motor Co. were opposing a fresh turnaround plan submitted by the debt-ridden carmaker, dimming hopes it will win enough support to take steps toward rehabilitation, company officials said Wednesday.
Ssangyong, South Korea's smallest automaker, has been under court-approved
bankruptcy protection since February. Its woes deepened this summer after
hundreds of fired workers occupied the company's only plant for more than two
months, halting production.
On Nov. 6, the Seoul Central District Court convened the first meeting with the
creditors and stakeholders of Ssangyong to decide whether to approve an original
turnaround plan, but the ailing carmaker failed to win approval because a
majority of foreign creditors voted against it.
The court will convene the second meeting on Friday. The foreign creditors were
meeting in Hong Kong on Wednesday to discuss Ssangyong's strategy, according to
officials at the carmaker.
With the foreign creditors decision to reject the new turnaround plan at the Hong
Kong meeting, Ssangyong is highly unlikely to win the court's approval on Friday,
industry sources say.
"The new plan was made in favor of creditors rather than shareholders," said a
senior official at Ssangyong, though some foreign creditors were still opposing
the capital writedown ratio.
"Although we reflected a part of the demands from foreign creditors in the new
turnaround plan, we could not accept more demands from them because that would
harm the interests of other stakeholders," the official said.
Under the original plan, Ssangyong, majority owned by China's Shanghai
Automotive Industry Corp., planned to cut the Chinese parent's holdings to 11.2
percent from 51 percent and repay its 1.23 trillion won (US$1.06 billion) in
debt over the next 10 years.
The plan also called for Ssangyong to write down its debts at a ratio of three to
one.
Ssangyong became the nation's first major corporate victim of the global economic
crisis as the slump hit sales of new cars last year. Some critics have accused
Shanghai Automotive of failing to live up to its investment plan and of stealing
technology from Ssangyong, which specializes in sport-utility vehicles.
If the court approves the new turnaround plan, Ssangyong's court-appointed
managers say they will sell most of Shanghai Motor's stake to other foreign
investors.
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 summer strike.
In the first half of this year, Ssangyong's net losses reached 443 billion won.
Sales also plunged 66 percent to 455 billion won, with operating losses totaling
153 billion won.
Shares of Ssangyong Motor dropped 8.22 percent to 3,295 won in early afternoon
trading on the Seoul bourse.
(END)
Ssangyong, South Korea's smallest automaker, has been under court-approved
bankruptcy protection since February. Its woes deepened this summer after
hundreds of fired workers occupied the company's only plant for more than two
months, halting production.
On Nov. 6, the Seoul Central District Court convened the first meeting with the
creditors and stakeholders of Ssangyong to decide whether to approve an original
turnaround plan, but the ailing carmaker failed to win approval because a
majority of foreign creditors voted against it.
The court will convene the second meeting on Friday. The foreign creditors were
meeting in Hong Kong on Wednesday to discuss Ssangyong's strategy, according to
officials at the carmaker.
With the foreign creditors decision to reject the new turnaround plan at the Hong
Kong meeting, Ssangyong is highly unlikely to win the court's approval on Friday,
industry sources say.
"The new plan was made in favor of creditors rather than shareholders," said a
senior official at Ssangyong, though some foreign creditors were still opposing
the capital writedown ratio.
"Although we reflected a part of the demands from foreign creditors in the new
turnaround plan, we could not accept more demands from them because that would
harm the interests of other stakeholders," the official said.
Under the original plan, Ssangyong, majority owned by China's Shanghai
Automotive Industry Corp., planned to cut the Chinese parent's holdings to 11.2
percent from 51 percent and repay its 1.23 trillion won (US$1.06 billion) in
debt over the next 10 years.
The plan also called for Ssangyong to write down its debts at a ratio of three to
one.
Ssangyong became the nation's first major corporate victim of the global economic
crisis as the slump hit sales of new cars last year. Some critics have accused
Shanghai Automotive of failing to live up to its investment plan and of stealing
technology from Ssangyong, which specializes in sport-utility vehicles.
If the court approves the new turnaround plan, Ssangyong's court-appointed
managers say they will sell most of Shanghai Motor's stake to other foreign
investors.
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 summer strike.
In the first half of this year, Ssangyong's net losses reached 443 billion won.
Sales also plunged 66 percent to 455 billion won, with operating losses totaling
153 billion won.
Shares of Ssangyong Motor dropped 8.22 percent to 3,295 won in early afternoon
trading on the Seoul bourse.
(END)
