Korea Development Bank (KDB) on Monday agreed to roll over 90 billion won ($75.2 million) of loans due this month from SsangYong Motor Co., a troubled South Korean unit of Indian carmaker Mahindra & Mahindra Ltd., to the end of December.

The cash-strapped sport utility vehicle maker asked the state lender for an extension on the debt payment of 70 billion won due July 6 and 20 billion won due July 19.

KDB had hinged its decision on whether SsangYong secures a loan extension from its foreign creditors. The Korean state lender has said it cannot extend the loan moratorium to a company with overdue debt and called on Mahindra to push harder for a deferment on its foreign loans, citing the Indian parent’s verbal support when first taking out the debt.

SsangYong has said it paid back a portion of its debt maturing in June to foreign lenders and extended the loan terms for the rest.

As of late March, SsangYong had 389.9 billion won of debt that is due within a year. In addition to the 90-billion-won loan from KDB, it owes about 109.2 billion won to Citibank Korea, 90 billion won to JPMorgan Chase, 47 billion won to BNP Paribas and 30 billion won to Bank of America.

Last month, Mahindra said it plans to give up control of its loss-making Korean unit as part of broad restructuring efforts to ride out the pandemic. The Indian parent holds a 75 percent stake in SsangYong, valued at about 375 billion won based on Monday’s trading price of 3,340 won. Its shares closed the day 3.01 percent higher from the previous session.

SsangYong posted an operating loss of 281.9 billion won last year, with a debt ratio of 755 percent as of the quarter ended March 2020.

By Pulse

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