SsangYong Still on Track to Survive

The South Korean carmaker SsangYong still has chances to survive in spite of the local court's decision to delay the verdict on the recovery plan until December 11. Curiously, Paul Williams, managing director of UK Ssangyong distributor Koelliker UK, thinks that SsangYong's plan will after all receive the go-ahead and advises all people involved in the matter to be a little bit more patient.

According to a report by just-auto.com, the reorganization plan submitted by SsangYong comprises reduced involvement from its biggest shareholder, SAIC Motor, and mentioned that the amount of shares owned by the Chinese company might be reduced to 11.2 percent. The other shareholders will be affected as well, with a three for one reduction currently on the table.

"Technically this is a debt that has to be dealt with in the same way that other creditors have been, many of whom have exchanged debt for equity," he says.

"But corporate bondholders simply look at the situation from a 'financial return' basis and will always object to the first offer made in order to try and get a better deal," Williams maintains.

"And ultimately the court has the right to ignore their request and issue a 'compulsory performance order' under their jurisdiction to enforce the ruling made. To be balanced and fair they have decided to consider a revised offer before making a final ruling."

Williams believes that the Korean court will most likely approve the business plan as the proposal basically meets all requirements. "We are on the right track to shortly seeing Ssangyong's turnaround business plan approved and ready for implementation," Williams says. "We just have to be a little bit more patient."