SOUTH KOREA: Ssangyong files new plan in court
Ssangyong Motor has filed revival plans with the Seoul Central District Court which must decide if they are feasible for the troubled SUV maker to remain under court receivership.
Plans must also be accepted by 75% of creditors with collateral, two out of three creditors without collateral and half of the shareholders before they are implemented, according to the Korea Herald.
A second meeting on 6 November between affected groups and the bankruptcy court will set the schedule for the third meeting when the decision to accept or reject the revival plans will be put to a vote, at a later date.
The company, paralysed recently by a sit-in protest by sacked workers whose eventual eviction turned violent, said the plans were based on the 22 May report that indicated that the continued value of the company was KRW389bn (US$319m) greater than the liquidation value and that was still the case despite the lengthy strike.
Ssangyong estimated the 77-day strike reduced its value as a going concern by only KRW31.8bn.
It owes about KRW1.23 trillion won of which KRW260.5bn is secured debt. According to a report filed with the Financial Supervisory Service, total debts stood were KRW1.78 trillion at the end of the first half.
According to the revival plans, Ssangyong will repay the secured debts in full, in instalments over five years at 3.84%.
Other debts owed to financial institutions will be paid back by converting 43% of the debts into new shares, 47% in cash payments over five years at 3%.
For debts incurred in commercial dealings with the company that are less than KRW10m, the company suggested exempting 5% and paying creditors back 95% in cash. For those over KRW10m, the company plans to convert 40% into shares, write off 5% and repay 55% in cash over five years.
Shanghai Automotive Industry Corp's stake in the company, the carmaker said it would cancel 80% of SAIC's shares - it currently holds 51.33% or about 62m shares.
For other shareholders, the company suggested converting three shares into one with a KRW5,000 face value.
Once the plans have been carried out, SAIC will hold 11.2% and ordinary shareholders will hold 17.7% of the company's shares.
The remaining 71.1% will be held by creditors whose debts have been converted into shares.