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December 18, 2009

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Ssangyong wins court nod for overhaul plan

A court overseeing bankruptcy protection for South Korean auto maker Ssangyong approved the company's rehabilitation plan yesterday, clearing a key hurdle in the debt-ridden sport-utility vehicle maker's path toward revival.

Ssangyong Motor Co went into court-approved bankruptcy protection in February amid falling sales and mounting red ink.

Ssangyong is majority-owned by Shanghai Automotive Industry Corp, though it lost management control amid the bankruptcy protection process.

In September, Ssangyong submitted a corporate rehabilitation plan to the court that centers on how to repay its debt worth about 1.2 trillion won (US$1 billion). It also included a capital reduction plan that will cut SAIC's stake in Ssangyong to 11.3 percent from the current 51.3 percent by next month.

Some creditors have so far rejected the plan over Ssangyong's proposed debt repayment terms.

But the Seoul Central District Court overruled the objections in giving approval yesterday, saying the plan has met all legal requirements and is believed to be able to protect creditor rights.


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