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South Korean Automaker SsangYong Goes Bankrupt, Mahindra Considers Sale

In March 1954, two companies – Ha Dong-hwan Motor and Dongbang Motor – founded the automaker that would eventually become SsangYong. Owned by Mahindra & Mahindra since 2011, the South Korean outfit has filed for bankruptcy after failing to repay $135 million in debt.
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Creditors include the Korea Development Bank and overseas financial institutions like BNP Paribas, JPMorgan Chase, and the Bank of America. As if that wasn’t enough, SsangYong missed a substantial payment to its parent company one week ago, and I’m not exactly surprised by this mess.

The South Korean brand posted 15 straight quarters in the red, and the ongoing health crisis has only exacerbated the already precarious financial situation. Alas, SsangYong has applied for an Autonomous Restructuring Support (ARS) program that will hopefully turn things around for the better.

Mahindra & Mahindra has been seeking a suitor for the company for the past six months, but so far, no automaker or investor has expressed interest in the brand. Given the current climate and the aggressive push for electrification, which is an expensive paradigm shift for the automotive industry as a whole, SsangYong needs all the luck in the world to get out of this mess.

The company has three months to negotiate with stakeholders – including creditors – to resolve the most important of issues. The trade ministry of South Korea is pushing for a sale according to local business and media, and the higher-ups at Mahindra & Mahindra seem open to a sale as well.

“Whilst this situation is not ideal, I strongly believe that the Autonomous Restructuring program will result in the birth of a stronger company,”
declared Kevin Griffin, SsangYong's UK head. “I want to reiterate that our operations are totally unaffected, and we are very much open for business.”

At the time of writing, Mahindra controls 74.65 percent of SsangYong. As for sales figures, the worldwide volume from January to November 2020 fell to 96,825 sport utility vehicles and trucks, representing a 20 percent decrease.
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About the author: Mircea Panait
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After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
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