SOUTH KOREA: Court approves Ssangyong rescue plan
A South Korean court has approved a rescue plan for debt-burdened Ssangyong Motor after it had been rejected by the automaker's foreign creditors.
The announcement, which will save hundreds of thousands of jobs, will allow the company to restructure as it faces debts of more than US$1bn, AFP said.
"We came to this decision as Ssangyong's value as a going concern exceeds that of liquidation and it is judged as being capable of carrying out the turnaround plan," a presiding judge said.
Ssangyong welcomed the decision and said it would double efforts to put its business back on track in the next three years by stepping up restructuring.
"Ssangyong will make all-out efforts to be reborn as a viable company," Lee Yoo-Il, a court-appointed manager, said in a statement, adding the company would soon present an "action plan" for its long-term survival.
About 200,000 jobs would be saved at Ssangyong's 430 contractors and parts makers. Official data showed 125 contractors connected to the firm went bankrupt or were forced to close their plants temporarily this year.
Ssangyong had been granted court protection from creditors in February in exchange for massive layoffs and cost savings.
However, the firm was hit by a crippling strike that ended in August as workers protested at the mass redundancies.
The strikers had occupied the company's main plant for 77 days, sparking violent clashes with riot police that led to more than 100 injuries.
Ssangyong said the court's approval would help quicken the process of finding a new owner. It promised to select a lead manager to handle the process in January.
Lee said the company would seek foreign or domestic investors to raise funds. "Some investors are interested in our company," he said.
Paul Williams, managing director of Ssangyong distributor Koelliker UK, said: "This is the news we have been waiting for. It's been a very frustrating year with considerable uncertainty, but this decision means that Ssangyong has a lifeline and I know that our Korean colleagues are determined to turn the company around. Most importantly, we can start planning properly for 2010, including the new C200 compact car."