SsangYong has filed for court receivership after it defaulted on a loan repayment of more than £40 million (60 billion South Korean won).
Automotive News Europe reported that the company owed 30 billion won to Bank of America, 20 billion to JP Morgan Chase & Co and 10 billion to BNP Paribas.
The South Korean car maker said it made the filing ‘after the company could not reach an agreement to extend its loan repayment deadlines with foreign banks’ due to ‘worsening business conditions’.
The company has applied for Autonomous Restructuring Support, which essentially buys it time to come to an agreement with those that it owes. It hopes this will be ‘another step in the transformation and rebirth of SsangYong into a competitive company’.
An official spokesperson from Mahindra, said: “During the period of Autonomous Restructuring Support, Mahindra will take responsibility as a major shareholder, and actively cooperate with SsangYong for the normalisation of management through to the early conclusion of negotiations with interested parties.”
An official source from SsangYong added: “We very much regret this situation which is the result of the difficulties being experienced from the worldwide Covid-19 situation, and the concern caused to our partners and stakeholders, especially our employees, sales networks and financial institutions. We are making every effort to transform the situation, and to build a more robust and competitive company for the future.”
Meanwhile, SsangYong Motors UK has confirmed that it continues to operate as normal.
Kevin Griffin, managing director for the brand in the UK, said: “Whilst this situation is not ideal, I strongly believe that the Autonomous Restructuring Programme will result in the birth of a stronger company. I want to reiterate that our UK operations are totally unaffected, and we are very much open for business.”
SsangYong is enjoying a growing reputation in the UK. Whilst still very much a niche car maker, it has switched from building basic commercial-focused pickup trucks to have a range of stylish crossovers, SUVs and pickups that appeal to mainstream consumers.