Despite the best efforts of South Korea’s riot police, Ssangyong’s industrial troubles remain unresolved today with a sit-in at its Pyeongtaek plant continuing. Moreover, a bankruptcy court has warned that the firm’s ongoing problems could hasten a decision on whether to end bankruptcy protection and liquidate assets.
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Local media reports today say that riot police are locked in a tense stand-off with protesters who have occupied the Pyeongtaek facility’s paint shop. That follows the entry of riot police into the plant yesterday, a move that provoked some violent confrontations between protesters and police. Protesters regrouped in the paint shop, where imflammable liquids and chemicals present a safety concern.
Meanwhile the Seoul Central District Court warned yesterday that the planned debt workout for Ssangyong Motor could be pulled if the carmaker’s problems worsen.
“If Ssangyong Motor’s debilitating problems are sustained and the carmaker’s going-concern value falls below liquidation level, we could cancel the workout procedure for the company even before Sept. 15, when the company is scheduled to suggest a workout plan,” the court said.
In an interview with The Dong-A Ilbo, the court commented on rumours that Ssangyong will soon enter court supervision. “The carmaker was asked to present its workout plan by Sept. 15. Therefore, it is impossible for the court to begin bankruptcy procedures,” it said.
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By GlobalData“If Ssangyong fails to suggest a workout plan by the deadline or its going-concern value significantly falls below liquidation value, bankruptcy protection might be brought to an end.”
“Ending Ssangyong’s bankruptcy protection means the court would draw back from the case and the carmaker should handle its own problems,” the court said.
“If the company has little possibility of turnaround, however, the court will stop bankruptcy protection and decide to put the carmaker under bankruptcy procedures.”
Police have been reluctant to get involved in the management-labour confrontation which started after a massive layoff announced last month as part of restructuring efforts to keep the company afloat and avoid liquidation.
Ssangyong has been under bankruptcy protection since February.
Ssanyong officials have expressed the hope that they can end the dispute and resume production at the
