(4th LD) Court approves turnaround plan by Ssangyong Motor

(ATTN: ADDS quotes in paras 13-15)
SEOUL, Dec. 17 (Yonhap) -- A South Korean bankruptcy court approved Thursday a
turnaround plan by troubled Ssangyong Motor Co., giving the debt-ridden carmaker
a chance to revive its struggling business, company officials said.

Ssangyong, the smallest carmaker in South Korea, has been under court-approved
bankruptcy protection since February. Its woes deepened after hundreds of fired
workers occupied the company's only plant for more than two months last summer,
halting production.
The approval by the Seoul Central District Court came in spite of opposition by
some bondholders who twice rejected the plan, saying it would undermine their
interests. Most analysts, however, predicted that the court would give its
approval, noting the carmaker's importance to the local economy.
Welcoming the court's decision, Ssangyong vowed to get itself in order over the
next three years.
"We, employees at Ssangyong Motor, appreciate the court's approval and will make
utmost efforts to put the company back on track," said Lee Yoo-il, one of two
court-appointed managers at Ssangyong.
Lee said the loss-making company aims to return to the black by the end of 2012
by selling assets and repaying debts.
Shares of Ssangyong Motor surged nearly 14 percent following the court's
approval, but the shares were suspended at 2:40 p.m. Trading will resume on
Friday, the Korea Exchange said.
Under the turnaround 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.
But even with the court's approval, doubts 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 said that they will choose a lead manager in
January to sell the carmaker's stake to foreign investors.
"We plan to set a guideline to select a stake-sale lead manager as soon as
possible and our target is to complete a deal by the end of 2010," Lee told
reporters.
Several companies have shown interest in Ssangyong, but Lee declined to identify
the potential buyers.
Park Young-tae, another court-appointed manager at Ssangyong, said the company
may be able to launch a crossover utility vehicle, code-named C200, in the middle
of next year if it secures 200 billion won in funding.
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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