State-run Korea Development Bank (KDB) on Wednesday denied it was notified of a collapse in the negotiations over a stake transaction that is pivotal in saving SsangYong Motor from going bankrupt.
“We had not heard of the breakdown,” an unnamed official from the state lender said, while admitting talks were not progressing well.
India’s Mahindra & Mahindra currently owns a 75 percent stake in the SUV-focused Korean car producer. It announced earlier that it was aiming to lower the stake to below 30 percent and retire up to 25 percent after stake sale. It is in talks with the sole potential buyer California-based HAAH Automotive.
SsangYong has been given until Feb. 28 to solve its default crisis or otherwise be placed under court receivership. A council of four related parties – SsangYong, creditors, Mahindra and HAAH Automotive – was aimed to reach an agreement until Jan. 22 but has not progressed due to delay in the talks between the buyer and seller.
HAAH Automotive is said to have already given up the deal.
SsangYong Motor will meet with its auto parts suppliers - about 350 - to explain the progress in negotiations and the following plans to ask for cooperation in the Thursday afternoon.
The carmaker has debt obligations to meet in the coming days, including a 180-200 billion won ($161.7-179.6 million) promissory note due on Friday. The parts suppliers estimate the cost of deliveries they have not been paid out since October reaches about 500 billion won or more.
Industry observers now expect SsangYong could bring up its pre-packaged plan to speed up restructuring of the balance sheet at the meeting in preparation for a buyout flop.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]