South Korean government and industry sources have indicated that the government will not provide direct aid to Ssangyong until potential investors are identified.
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The Korea Herald reported that the government’s cautious stance regarding Ssangyong was reflected in Minister of Knowledge Economy Lee Youn-ho’s comment that much still remains to be done to ensure Ssangyong’s survival, and that developments concerning restructuring plans and the court’s decision must be closely monitored.
However, the newspaper said government plans to implement measures to help Ssangyong’s suppliers find new contracts with local and overseas carmakers.
Assistance from Ssangyong’s main creditor bank, Korea Development Bank, is likely to be limited, the Herald report said. Although the KDB is said to be reviewing Ssangyong’s request for funds to cover restructuring costs the bank remains, for the moment, unwilling to finance the development of the C200, Ssangyong’s new sport utility vehicle.
The development of the new car, considered essential for the company’s survival, has been delayed due to the recent 77-day strike. The C200’s launch, which had originally been scheduled for late this year, has now been delayed to 2010.
Although the government says it will take steps to assist the company if new investors are found, it may be sometime before the carmaker finds a new majority shareholder.
The carmaker, which is scheduled to resume production today, is hoping to restore its reputation and boost sales by updating its existing lineup.
The company recently filed an investment application in court to develop a 2010 version of the luxury sedan Chairman H.
In addition, the company plans to introduce updated versions of its SUVs — Actyon, Kyron and Rexton — by November, and has resumed development of the C200.
