√SsangYong off life support after repaying $AU340 million debt

Struggling South Korean car-maker SsangYong is beginning to recover from a tumultuous 23 months which included bankruptcy, a failed financial takeover, and a court-ordered debt repayment plan.

SsangYong’s darkest days could be over, with the South Korean car-maker announcing it has repaid the 299.4 billion Won ($AU340 million) debt it owed to its creditors, subcontractors, and former parent company Mahindra.

For the past 23 months, SsangYong’s global operations have been in financial turmoil due to years of failing to meet production and sales expectations.

In December 2020, Indian conglomerate Mahindra and Mahindra sold its 75 per cent stake in SsangYong, leading to the South Korean company filing for bankruptcy – owing 315.3 billion won ($AU357.7 million at the time) in overdue debt to several financial institutions.

In October 2021, a consortium led by South Korean electric bus and truck manufacturer Edison Motors announced its plans to acquire SsangYong for 304.8 billion Won ($AU348 million).

However, Edison Motors’ proposed takeover of SsangYong stalled in March this year when the group defaulted on its final 274.3 billion won ($AU311 million) payment – although the car-maker reportedly retained the $US25 million ($AU33.2 million) deposit.

In June 2022, South Korean chemical and steel company KG Group made a 800 billion won ($907.7 million) bid for SsangYong, which was ultimately approved by South Korea’s Seoul Bankruptcy Court in August – with specific conditions.

As reported by South Korean publication The Korea Times, SsangYong’s ‘rehabilitation plan’ included the repayment of 237 billion won ($AU269 million) to its creditors, 55 billion won ($AU62 million) to subcontractors and 7.4 billion won ($AU8.4 million) to Mahindra and Mahindra.

While SsangYong had to repay the full amount it owed to its creditors, it was only required to repay a fraction of what it owed to its subcontractors (13.97 per cent of 393.8 billion won) and Mahindra (5.43 per cent of 136.3 billion won).

This week, SsangYong announced the rehabilitation plan for its 299.4 billion won ($AU340 million) debt had been completed on November 11, with the South Korean company now focusing on the future.

In a media statement, the car-maker said it “now plans to accelerate its early management normalisation by increasing sales and quickly making a profit”.

SsangYong’s sales approach is set to be headlined by the upcoming Torres SUV and ‘U100’ electric vehicle – although the latter is yet to enter production.

As previously reported, the SsangYong Torres is likely to feature in the company’s Australian line-up next year, positioned between the mid-sized Korando SUV and large Rexton SUV.

Between January and October 2022, SsangYong has sold 2967 vehicles in Australia – just 11 examples shy of its annual record of 2978, set last year.

The Musso ute accounts for a majority of SsangYong’s local sales, with the 1336 examples sold year-to-date eclipsing the Rexton (1176 sold) and Korando (455 sold).

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