The final decision on whether to approve Ssangyong’s revised plan to turn the company around will be made by a Seoul bankruptcy court on December 17th. If the revised plan is not approved, a liquidation of the firm’s assets would follow, but most local observers expect the plan to be forced through by the Seoul Central District Court.
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Ssangyong said it ‘deplored’ the result of the voting at the Ssangyong creditors’ meeting last week when a revised rescue package failed to win approval from a group of creditors.
The rejection vote last week had been widely expected as Ssangyong’s foreign bondholders had already opposed the size of the capital writedown, while shareholders supported it.
Ssangyong said the company had made ‘every possible effort to submit a plan that was fair and equitable to all parties through ample discussions with stakeholders’.
‘It is extremely regrettable to see the modified plan was voted against by a group of creditors especially when the plan included several new suggestions in consideration of the company’s legal ability to redeem,’ the company said in a statement.
It said its ‘months-long efforts’ were voted down by some foreign creditors and added that ‘their irrational requests went beyond relevant law and precedents’.
Ssangyong said that it will be a ‘major loss for the national economy’ if the company isn’t given the chance to puts its revised business plan into action. Suppliers, dealers, workers, management and politicians including the mayor of Pyeongtaek City (Ssangyong’s production base that was the scene of violent industrial unrest earlier this year) are behind the plan, it said.
“It is regrettable to see our turnaround plan being rejected again by a group of creditors even after we did our best to make the plan as fair and equitable as possible,” said Lee Yoo-il and Park Young-tae, Ssangyong Motor Company’s co-legal trustees.
“However, most of the creditors want to see Ssangyong Motor Company revive, and we’re also making every effort to normalise the operation by close labour-management cooperation. We therefore look forward to see the final approval on December 17,” they added.
Crucially, Ssangyomg’s biggest creditor – the Korea Development Bank – is behind the Ssangyong revival plan.
Analysts say that court approval for Ssangyong’s plan this week is the most likely outcome because of the company’s importance to the local economy.
The company could then be sold on to foreign investors as a going concern, some analysts say.
