Mahindra-owned SsangYong Motor Files For Court Receivership In South Korea
Court receivership is one stop short of bankruptcy under the guidelines of South Korea’s legal system
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Mahindra owns about 75 percent of SsangYong Motor Company.
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SsangYong has multiple SUV models in its global lineup.
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The Alturas G4 and XUV300 are partly or fully based on SsangYong models.
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The courts will now decide the future of SsangYong Motor Company.
Mahindra & Mahindra owned SsangYong Motor has filed for court receivership in its parent country South Korea after the carmaker failed to pay 60 billion won (approximately Rs 400 crore) worth of debt to banks. It asked its creditors to roll over the loans but the banks refused to do so. Under court receivership, the courts will decide whether the company should be revived and how.
SsangYong is an SUV manufacturer with models such as the G4 Rexton, Tivoli, Korando and Rexton Sports in its lineup. In India, the G4 Rexton is sold as the Mahindra Alturas G4, whereas a reworked Tivoli is sold as the XUV300.
Mahindra currently owns an almost 75 percent stake in the company. It was previously considering injecting fresh capital worth 230 billion won (approximately Rs 1,600 crores) into the company, pending a board approval. The board, however, voted to not go ahead with the investment and is instead, looking to make a special, one-time infusion of up to 40 billion won into the company over the next three years, so SsangYong can continue with its daily operations.
Mahindra is also ready to give up its title of the majority stakeholder if it can find a new investor for the Korean carmaker. There has been no word from Mahindra on the impact of this situation on its India models, but we expect to get clarity soon.
