Ssangyong Motor’s domestic creditors and subcontractors have submitted a joint petition to a court in Seoul, calling for the approval of the troubled automaker’s self-rescue plan despite opposition from overseas creditors.
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The petition came just days ahead of the Seoul Central District Court’s expected final decision on Friday (11 December, 2009) on whether to approve the turnaround plan, which was rejected by foreign creditors last month, the Korea Times reported.
That day, Ssangyong stakeholders at home and abroad will hold a final vote to decide the fate of the nation’s smallest automaker, amid growing scepticism of the plan among overseas stakeholders.
“Following the rejection, companies related to Ssangyong have fallen into severe financial hardship. We urge the court to approve the plan regardless of opposition from overseas shareholders,” Choe Byung-hoon, who submitted the petition on behalf of a total of 1,007 companies was quoted as saying. “Once endorsed, we will put forth our utmost efforts to put the troubled company back on track.”
One of the major stakeholders of Ssangyong, the state-run Korea Development Bank, also expressed hope for the court’s approval of the turnaround plan, the paper added.
According to other local reports, a senior official at the bank said, “If the uncertainty surrounding Ssangyong continues to exist, not only the company and creditors but also South Korea will be negatively affected,” indicating his support for the plan.
But overseas shareholders are showing no signs of backing it.
According to reports, overseas creditors are still feeling negative about Ssangyong’s survival, voting against the plan again at a recent meeting in Hong Kong.
Ssangyong, a former affiliate of China’s Shanghai Automotive Industry Corp (SAIC), submitted the plan to the court on 15 September.
The plan includes writing off about 80% of the shares owned by SAIC, which would reduce its stake from 51% to 11.2%, and converting KRW393bn (US$334.7m) of its debt into new equity.
Ssangyong, primarily a sports utility vehicle maker, is reportedly negotiating with two or three foreign investors for a possible sale.
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