April 20, 2021

SsangYong lender prepared to assist if M&M stays

Mumbai: South Korea’s state-run Korean Growth Financial institution (KDB) might play the peacemaker at money strapped SsangYong Motor, which has filed for court docket receivership and is coping with labour issues, whilst its Indian father or mother Mahindra & Mahindra is making an attempt to exit the corporate. Mahindra has publicly said a number of instances over the previous six months its intention to exit the Korean automaker.

KDB, SsangYong’s largest lender, is prepared to inject extra funds into the corporate, supplied Mahindra retains its majority stake in it, mentioned individuals within the know. Whereas this goes towards Mahindra’s plan of disposing of its stake, the lender insists that Mahindra stay as the most important shareholder at the least until the brand new loans are repaid. KDB can also be very agency that it’s going to present monetary assist provided that SsangYong exhibits particular and honest plans for its progress and survival.

Mahindra, on its half, has indicated willingness to proceed its present ensures for SsangYong’s loans from overseas banks for an extended interval, to facilitate a deal to promote its stake. “KDB is requesting Mahindra to supply a assure for SsangYong’s debt as a significant shareholder. That’s the reason KDB requires Mahindra to retain its stake,” mentioned Seungbum Lee, a associate at South Korean legislation agency Yulchon LLC.

With a court docket permitting SsangYong to undertake autonomous restructuring assist until February 28, earlier than placing it on a company rehabilitation programme, the Korean automaker is discovering out methods to outlive and is in steady dialogue with KDB, Mahindra and a possible investor – US-based car distributor Haah Automotive.

Mahindra managing director Pawan Goenka confirmed just lately that the corporate was in talks with a possible investor and that it anticipated to signal a time period sheet as early as January 8. “The potential investor, largest creditor and SsangYong are nonetheless in dialogue,” an organization spokesperson mentioned in an emailed response to ET’s queries.