Wednesday, December 23, 2009
Court approves plan for SsangYong to exit bankruptcy protection
SsangYong's restructuring plans have been approved by the courts in South Korea.
It clears the way for the implementation of a three year programme designed to increase competitiveness, return to profitability and triple revenues over this year, said the carmaker.
The Seoul Central District Court said SsangYong’s revival was proven to be worthier than its liquidation.
The ruling now allows SsangYong to seek additional investment and financing, as well as forging ahead with its new model programme.
Although some overseas creditors had opposed the plan, SsangYong had secured a landslide number of votes for the plan from shareholders, collateral-based and non-collateral bondholders and domestic creditors.
The plan includes a write-off of 80% of the shares held by Shanghai Auto Industry Corporation (SAIC) which will reduce its stake from 51% to 11.2%, and a conversion of 393 billion won of debt into new shares.
Other shareholders will see their holdings written down at 3-to-1 initially, with a further write-down for all shareholders in January.
Paul Williams, managing director of SsangYong distributor Koelliker UK, said: “This is the news we have been waiting for. It’s been a very frustrating year with considerable uncertainty, but this decision means that SsangYong has a lifeline and I know that our Korean colleagues are determined to turn the company around.
"Most importantly, we can start planning properly for 2010, including the new C200 compact car.”
For the eighth month in succession, SsangYong increased UK sales in November over the same month last year.
This year to the end of November, SsangYong new passenger car registrations have hit 762, a 28.5 per cent improvement over 593 registrations in the same period last year.
Paul Williams, added: “Despite the problems in Korea, our dealer network has remained positive and loyal, and this is reflected in our sales performance in very difficult circumstances.
"Today’s court decision in Seoul means that we have turned a corner and we owe a big thanks to the dealers for toughing this out and seeing it through.”
DATED: 23.12.09
FEED: AM
