Court to decide fate of Ssangyong if creditors reject turnaround plan

SEOUL, Dec. 11 (Yonhap) -- A South Korean court said Friday it will make a key
decision on the fate of Ssangyong Motor Co. next week if the ailing carmaker
fails to win the support of creditors to push forward its turnaround plan.
The creditors and shareholders of Ssangyong, which has been under court-approved
bankruptcy protection since February, voted earlier in the day on a fresh
turnaround plan submitted by the debt-ridden automaker.
Hopes for Ssangyong to win the support it needs from creditors on its plan for a
capital writedown and a debt-to-equity swap appeared dim, however, as foreign
bondholders opposed the plan, Ssangyong officials said earlier.
The Seoul Central District Court convened a meeting on Nov. 6 with the creditors
and stakeholders of Ssangyong to decide whether to approve an original turnaround
plan, but Ssangyong failed to win approval because a majority of foreign
creditors voted against it.
If the new turnaround plan fails to win the support of two-thirds of Ssangyong's
creditors at the Friday meeting, officials with the Seoul court said they will
make a final decision on Thursday on whether to approve the plan or liquidate the
carmaker.
Under the original plan, Ssangyong, majority owned by China's Shanghai Automotive
Industry Corp., would have cut the Chinese parent's holdings to 11.2 percent from
51 percent and repay its 1.23 trillion won (US$1.05 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.
But its foreign creditors have opposed the ratio of the capital writedown,
Ssangyong officials said.
Ssangyong became the nation's first major corporate victim of the global economic
crisis as the slump hit new car sales last year.
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.
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