Ssangyong Motor operations stay afloat, amid hopes of new investment talks
Ssangyong Motor is managing to keep its manufacturing operations afloat, as some suppliers are temporarily providing a minimal amount of necessary parts while the automaker works on finding a new investor.
“Our manufacturing facilities are fully functional as sufficient parts are being supplied for now,” an official said.
“But this is a provisional situation as no official deal has been struck regarding resuming the (once stalled) parts supplies.”
In December, the carmaker had to suspend the operation of its factory in Pyeongtaek, Gyeonggi Province, for two days after its key suppliers refused to deliver parts. The Pyeongtaek plant accounts for 86.54 percent or 3.1 trillion won ($2.81 billion) of the company’s yearly sales.
The suppliers’ strike came in the wake of the carmaker’s apparent lack of payment capacities, as the carmaker failed to pay 60 billion won worth of debts to its foreign creditor banks and 90 billion won to the state-run Korea Development Bank.
The list of anxious suppliers included Hyundai Mobis, LG Hausys, S&T Dynamics, BorgWarner Ochang, and Continental Automotive.
Of them, Hyundai Mobis and S&T Dynamics resumed their supply for a few days while the remaining three have prolonged a wait-and-see approach.
Ssangyong Motor’s fate is to largely depend on whether or not it succeeds in finding a new owner before court receivership procedure starts.
On Jan. 1, major shareholder Mahindra & Mahindra said that it is in talks with an investor for the sale of its majority stake in Ssangyong Motor, expecting to clinch a non-binding agreement within the first half of the month and conclude the procedure by Feb. 28.
The Korean motor company, after applying for court receivership in December, has been given a two-month grace period to work on the Autonomous Restructuring Support program.
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