SsangYong files for bankruptcy, continues trading

National distributor Great Lake Motors assures Kiwis it’s ‘business as usual.’

SOUTH KOREAN recreational vehicle specialist SsangYong Motor has secured protection under South Korea’s bankruptcy administration process after it failed to repay creditors a loan worth roughly $NZ76,000,000.

The company has been given three months to work through its affairs, in hope that it will be bought during that time, and will continue to operate normally during that period, says Andrew Bayliss, general manager for the New Zealand distributor, Great Lake Motor Distributors.

Insofar as the brand’s affairs in NZ are concerned, it is business as usual, he says.

He is also confident the situation will end well, asserting “there is a buyer in the wings” for the make.

“We expect that deal to go ahead.

“For New Zealand it is business as usual. As it is in other markets. We are still getting product, we are still getting cars produced. We have got cars being despatched today, in fact.

“For New Zealand, we do not anticipate any interruption.”

Mr Bayliss disputes the brand has filed for bankruptcy, though this has been reported globally. The Korean administration process is, however, similar to the American Chapter 11 administration processes which is used to assist a business restructure often prior to a sale.

Entering into receivership in South Korea means SsangYong has volunteered to be dramatically restructured, according to a report on the website of Forbes magazine. 

It said all of SsangYong Motor’s assets have been frozen under the receivership programme, which protect it from action over its outstanding debts and receivables.

A report on the website of British weekly motoring publication Autoexpress cites SsangYong as claiming it has delayed the repayment due to worsening business conditions globally, and having failed to come to an agreement to extend repayment deadlines with foreign lenders has applied for receivership. 

“The company plans to resolve the current liquidity issue early before the rehabilitation procedures are commenced by applying for Autonomous Restructuring Support,” read a statement.

Autonomous Restructuring Support gives the brand a further three months to agree resolutions with creditors before court action. 

Indian automotive giant Mahindra and Mahindra has owned a 70 percent stake in SsangYong since 2011, and currently owns 75 percent of the business. It has been looking to sell on the brand.

The make, South Korea’s fourth largest car maker, has sustained 15 straight losing quarters. Its main creditor is the Korea Development Bank (KDB), though foreign financial institutions are also owed money. 

SsangYong sales globally for 2020 are around20 percent down on 2019. 

A SsangYong spokesperson in South Korea said: “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.”

Great Lake Motors has held SsangYong distribution rights in NZ since 2010. GWM is run by Taupo father and son Rick and Deon Cooper. Models represented in this market include the Rexton, Tivoli and Korando SUVs and the Rhino utility.