SsangYong Motor rehabilitation plan approved

by Autocar Pro News Desk , 31 Aug 2022


Auto major Mahindra & Mahindra (M&M) in a regulatory filing has informed that the interested parties of SsangYong Motor Company (SYMC), including itself as a shareholder and unsecured creditor of the company have approved a rehabilitation plan prepared by the receiver. 

M&M said that rehabilitation plan reflects the investment agreement between the KG consortium and SYMC pursuant to which the KG consortium will acquire the debt-ridden SYMC for 930 billion won (equivalent to approximately Rs5,523 crore) through primary equity investments in SYMC. After the interested parties’ vote procedure, the Seoul Bankruptcy Court (Court) in attendance also approved the rehabilitation plan.

As part of the rehabilitation plan and upon primary investments by KG Group and certain capital restructuring to be undertaken in accordance with the rehabilitation plan, the current outstanding dues of the Company would be restructured partly in cash and partly by conversion into equity and the current equity shareholding will get diluted. KG Group-led Consortium would get a stake of 80.50 percent in SYMC against their investment. Further, the company will get a cash payment of approximately 10 billion won (equivalent to approximately Rs.59.38 crores) and ultimately the shareholding of the Company will stand reduced to approximately 5.15 percent.

Also, Mahindra Electric Mobility, a subsidiary of the company, would get a stake of approximately 0.04 percent and cash payment of approximately 0.24 billion won (equivalent to approximately Rs1.42 crore) against settlement of its outstanding dues. Based on current estimates of the value of the settlement, and the carrying value of the Company’s exposure to SYMC as of 30th June 2022, the company expects no further impairment or write-off due to this rehabilitation plan.

Upon implementation of the rehabilitation plan, SYMC and the subsidiaries of SYMC including SsangYong Australia Pty, SsangYong European Parts Center BV and SY Auto Capital Co. would cease to be subsidiaries of the company. 

 


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