Ssangyong Motor awaits key ruling on turnaround plan

SEOUL, Dec. 17 (Yonhap) -- Ailing Ssangyong Motor Co. was awaiting a bankruptcy
judge's ruling on Thursday over whether to approve a turnaround plan by South
Korea's smallest automaker.

Approval of the plan by the Seoul Central District Court, in spite of the
apprehension expressed by bondholders, will provide a much-needed lifeline for
the troubled Ssangyong, which entered bankruptcy protection in February of last
year, while rejection means the company will eventually be liquidated.
Under the plan, Ssangyong, majority owned by China's Shanghai Automotive Industry
Corp., would cut the Chinese parent's holdings to 11.2 percent from 51 percent
and repay some 1.23 trillion won (US$1.05 billion) in debt over the next 10
years.
The plan also calls for Ssangyong to write down its debts at a ratio of three to
one.
Industry observers say that despite bondholders' reservations they expect the
court to approve the plan because of the company's importance to the local
economy, though some warn that even if the plan is approved, doubts will persist
over the company's viability.
In the first half of this year, Ssangyong's net losses reached 443 billion won.
Sales also plunged 66 percent from a year ago to 455 billion won, with operating
losses totaling 153 billion won.
Ssangyong's court-appointed managers say that if the court approves of the plan
they will choose a lead manager in January to sell the carmaker's stake to
foreign investors.
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.
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