May 16, 2021

JP Morgan calls for mortgage compensation of 40 billion wons from SsangYong

NEW DELHI: JP Morgan has sought compensation of mortgage price 40 billion Korean wons from Mahindra & Mahindra’s troubled international arm SsangYong Motor Firm (SYMC) however the South Korean automaker has expressed its incapacity to pay the quantity now.

Following the Korean automaker’s software for rehabilitation dated December 21, JP Morgan issued a discover to the cash-strapped agency demanding the compensation of an impressive mortgage quantity of 40 billion KRW (round Rs 268 crore with curiosity), M&M stated in a regulatory submitting.

“SYMC has at this time intimated to the Korean Inventory Change that it couldn’t repay the mortgage quantity of 40 billion KRW to JP Morgan on account of its software for rehabilitation,” it added.

The Korean automaker has excellent loans aggregating to 100 billion Korean Received (round Rs 680 crore) from Seoul-based branches of JP Morgan Chase Financial institution, BNP Paribas and Financial institution of America.

Final week, M&M had knowledgeable the bourses that SYMC has missed repayments of loans aggregating to 60 billion KRW (round Rs 408 crore).

On December 21, SYMC filed an software for graduation of rehabilitation process with the Seoul Chapter Court docket beneath the Debtor Rehabilitation and Chapter Act of South Korea.

The troubled automaker has additionally utilized for an autonomous restructuring assist (ARS) programme which is a court-designed course of.

M&M, which owns round 75 per cent in SsangYong, has already dedicated to cowl the above talked about loans given by the banks and has clearly acknowledged that its closing legal responsibility can be restricted to the extent of quantity not recovered from SYMC.

Elaborating particularly on the JP Morgan dues, the corporate stated within the submitting: “Upon fee of the dues by the corporate (M&M) to the financial institution, the corporate can be subrogated to all of the rights of the financial institution in opposition to SYMC and the corporate will step into the footwear of the financial institution as creditor and can be entitled to all rights which the financial institution had in opposition to SYMC, with respect to this mortgage.”

The Mumbai-based auto main had acquired the loss-making SsangYong in 2010 however failed to show it round since then regardless of a number of makes an attempt.

M&M holds practically 75 per cent within the Korean firm now and has since invested over USD 110 million.

SsangYong has been fighting deteriorating earnings since 2017 when it slipped into the crimson with a web lack of 66 billion wons as in opposition to a web revenue of 58 billion wons in 2016. In 2018, its web loss rose to 62 billion wons after which ballooned to 341 billion wons in 2019.