SsangYong Motor announced plans to sell the site of its only vehicle assembly plant to help raise funds, as it continues its battle to stay in business.
The government of Pyeongtaek, where the plant is located, 70km south of Seoul, said it had signed a memorandum of understanding with the court-appointed administrator to acquire the 850,000 sq m site which has been valued at KRW900bn (US$785m).
The struggling automaker, which was put under court receivership in April, has implemented a number of self-rescue measures after its largest shareholder, Mahindra & Mahindra, failed to secure a buyer for its 75% stake after two years of trying.
According to local reports, Ssangyong plans to build a new plant in the same city. The automaker had earlier confirmed it plans to switch its entire product range to all-electric models.
Pyeongtaek city government said it would provide administrative support for the process of building and relocating to a new plant.
Mayor Jung Jang-seon said in a statement “We will actively support Ssangyong Motor to grow into a global company that contributes to the development of the local economy.”
Earlier this month, Ssangyong administrator, EY Han Young, launched a closed auction for the company and will begin to review the bids from the end of July.
Today, close to half of Ssangyong’s 4,590 employees began taking unpaid leave on a rotational basis, as part of a two-year company self-rescue programme agreed with the labour union in June.
Under the plan, half of the 4,190 production staff and 30% of the 400 white collar workers will take unpaid leave in turns to help the company cut costs.