Ssangyong Motor made an announcement on Dec. 15 that it has delayed repayment of about 60 billion won ($55 million) in principal and interest on loans due to worsening business conditions.
Ssangyong explained that it is seeking to extend the maturity date with the lending agency due to a lack of repayment funds. The principal of the loan is 59.9 billion won and the interest is 60 million won. This is equivalent to 8.02 percent of Ssangyong's 749.2 billion won in equity capital.
Ssangyong is required to repay about 20 billion won in principal and 20 million won in interest to JP Morgan, 10 billion won in principal and 10 million won in interest to BNP Paribas, 30 billion won in principal and 30 million won in interest to Bank of America Merrill Lynch.
The maturity of 90 billion won in loans borrowed from Korea Development Bank will also be returned on Dec. 21. The KDB will decide whether to extend the maturity of the loans after watching foreign financial institutions extend the maturity.
“We are closely watching whether Ssangyong Motor will be cleared of overdue debts to foreign financiers,” a KDB official said.
India's Mahindra, a major shareholder of Ssangyong Motor, is determined to give up its status as a major shareholder by lowering its stake, and Ssangyong Motor has recorded losses for 15 consecutive quarters, deepening its management difficulties.
Ssangyong Motor, which is looking for a new investor, has been rejected three times in a row recently in auditors’ opinion.
