SsangYong Motor has been given the green light by Korean authorities to go into receivership to protect it from its creditors.
The South Korean automaker, which is 51.3% owned by Chinese automaker SAIC Motor, was however warned that going into administration did not guarantee its future.
“A revival requires the company’s own efforts, including strong restructuring, and the concession of creditors. If its own effort is not enough, the revival process will be abolished,” the court said in a statement.
Under the deal, the Chinese firm will lose management control of Ssangyong but will maintain rights to some other assets.
The court appointed Lee, Yoo-il, former president of Hyundai Motor, and Park, Young-tae, Ssangyong’s director of finance planning, to manage the company.
Earlier this week Ssangyong resumed vehicle production as parts supplies returned to normal.
Ssangyong was forced to halt production in January when parts suppliers, concerned about payment, held back deliveries after it filed for bankruptcy protection due to liquidity problems.