Ssangyong Motors in South Korea filed for bankruptcy protection after continuous losses
Recently, we learned from overseas media that South Korea’s Ssangyong Motor Company was once again in a liquidity crisis and applied for a statutory reorganization on December 21, local time.
According to reports, after the board of directors of Ssangyong Motor decided to apply for corporate reorganization on December 21, it submitted an application for initiation of the reorganization process, an application for company property preservation and other materials to the Seoul Rehabilitation Court at 3 pm on the same day. This is the first time that Ssangyong Motor applied for corporate reorganization in January 2009 when it encountered the global financial crisis, and applied again after 11 years.
After 15 consecutive quarters of losses, Ssangyong Motor has been unable to repay 165 billion won (about 980 million yuan) of foreign debt. This includes Ssangyong Motor’s loan of 90 billion won to the Industrial Bank, which failed to be repaid on the day of the extension; the 15 billion won of Woori Bank’s loan and the failure to repay the principal and interest; and the 60 billion won of loans to foreign financial institutions. Including, Ssangyong Motor’s outstanding loans totaled 165 billion won.
During the period from 1 to 11 months this year, Ssangyong Motor’s sales decreased by 18.3% to 79,400 units, making it the only auto company with negative growth among the five major automakers in South Korea. Established in 1954, Ssangyong Motors is a well-known South Korean car company. Many of its models have been heard more or less by domestic users, such as Korando, Rexter, Chairman and other models. Ssangyong Motor, which was on the verge of bankruptcy due to the financial crisis, was invested 522.5 billion won by Indian car company Mahindra in 2011 to acquire 70% of Ssangyong Motor's shares, saving Ssangyong Motor from the brink of bankruptcy. However, this time Ssangyong Motor applied for bankruptcy protection again, and it is estimated that it has been unable to recover.