SsangYong Motor Co., the South Korean subsidiary of Mahindra & Mahindra Ltd., filed for bankruptcy after failing to repay loans worth Rs 680 million to lenders such as JPMorgan Chase, Bank of America and BNP Paribas.
SsangYong on Monday filed an application for the initiation of rehabilitation proceedings with the Seoul Bankruptcy Court under South Korea’s Bankruptcy and Debtor Rehabilitation Act, the automaker said in a regulatory filing with the Stock Exchange from Korea.
That comes a week after M&M reported that it had defaulted on loans totaling around 60 billion won, or Rs 408 crore due on December 14, bringing the total outstanding loan to Rs 680 crore or 100. one billion Korean won.
The company applied for an autonomous restructuring support program, a process designed by the court. The parent said in the filing that if the court approves the restructuring, SsangYong will continue to operate under the supervision of its board and will negotiate with stakeholders to reach an understanding on a reactivation package, which may include equity and debt financing and other. related actions. .
Now, the bankruptcy court will deliberate and review the application and relevant documents submitted by SsangYong to determine whether or not the court will begin the restructuring process, M&M said in a filing.
In September, M&M reported that more than 98% of shareholders had approved the company’s decision to transfer, dilute or cease the controlling stake in its Korean subsidiary after it failed to reverse it even nearly a decade after the acquisition.
