SSANGYONG

Famous Korean brand is serious about disappearing

Car sales plummeted from 2020 onwards because of the health crisis that plagued the entire world. All the automakers suffered a squeeze on their accounts, although some fared better than others. Among the worst is SsangYong Motor Co Ltd, which has declared bankruptcy.

The Korean company filed for bankruptcy in December 2020 after failing to repay a loan of about $54.44 million. Indian automaker Mahindra & Mahindra, which has a 74.65% stake in SsangYong, has long signaled its intention to leave the company. Mahindra had purchased SsangYong on the brink of bankruptcy in 2010, after being abandoned by SAIC.

The company's future has been uncertain for at least a year. Of the 60 billion won of debt, the company owes approximately 30 billion won to Bank of America Corp, 20 billion won to JP Morgan Chase & Co and 10 billion won to BNP Paribas. That, along with the drop in sales, brought him closer to bankruptcy.

The debt-laden automaker was to be acquired by a consortium led by Edison Motors Co. That consortium would acquire the automaker in a deal worth 305 billion won, about $250 million at current exchange rates.

However, SsangYong Motor has just announced that the takeover deal by the electric bus manufacturer has been cancelled. According to various news sources, the prospective buyer did not make the payment before the deadline, so SsangYong officials chose to look for a new buyer.

More specifically, the payment of the 305 billion won was to materialize in two phases. The first one consisted of paying 10% in advance. The remaining 274.3 billion won was due to be deposited before March 25. As this did not happen, the terms of the contract were not met and SsangYong withdrew from the agreement.

Autonews