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July 1, 2021

Ssangyong given two months to submit recovery plan

Bankrupt Ssangyong has been given extra time to prepare a recovery plan.

By Graeme Roberts

The Seoul Bankruptcy Court has given Ssangyong Motor an additional two months to submit a rehabilitation plan in view of efforts being made to find an investor in the company.

In April the bankruptcy court placed the South Korean automaker under court receivership after management failed to find a buyer after the company filed for bankruptcy in December 2020.

The two-month extension gives Ssangyong’s court-appointed administrators and management until the beginning of September to have a rehabilitation plan in place.

On Monday the leading administrator, accounting firm EY Han Young, announced it would accept bids for the company until the end of July and would complete preliminary reviews on these by the end of August.

The two-month extension means the administrators have had to step up the bidding and review process.

Last month, half of the company’s employees agreed to go on unpaid leave for two years while the remainder agreed to pay cuts as part of a self-rescue plan proposed by the administrator.

US vehicle importer HAAH Automotive Holdings had expressed interest in buying the company last year but failed to submit a bid.

Other potential interested parties include local electric bus maker Edison Motors, small electric vehicle maker K Pop Motors and private equity fund Park Seok-jeon & Co.

Ssangyong’s global sales fell by over 19% at 31,660 units in the first five months of 2021 after a similar fall to 107,416 units in the whole of 2020.

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