Filed under: China, Earnings/Financials
Ssangyong faces liquidation if SAIC doesn't prop up ailing automaker
Things are looking dire at Korea's Ssangyong Motors, which, as you might recall, was unable to make payroll last week due to a total lack of cash on hand. The sordid tale continues this week as Ssangyong's largest creditor, Korea Development Bank (KDB), suggests that it will simply liquidate the automaker if Shanghai Automotive Industries China, otherwise known as SAIC, isn't willing to prop up its ailing subsidiary. As of last week, SAIC had said that it didn't intend on bailing out Ssangyong.KDB is looking for 120 million won in cash from SAIC, along with another 200 million won in guarantees for loans. Those two bits of financial aid total about $249 million in U.S. funds. If SAIC refuses, KDB says it will not consider making any more loans to Ssangyong. What that means for displaced workers at the Korean automaker we don't know, but it doesn't sound good.
[Source: Gasgoo.com]
Reader Comments (Page 1 of 1)
LeRobert 5:13PM (12/31/2008)
Don't you mean 120 BILLION won and 200 BILLION won?
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refugee7 5:34PM (12/31/2008)
Isn't it suppose to be 120 billion South Korean won and 200 billion won?
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catgirlshyla 6:02PM (12/31/2008)
So, no Ssangyong Chairman to the USA??
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Richard S. 7:13PM (12/31/2008)
Ssangyong. Why the two "S's"? How do you pronounce it? As if it is one "S"?
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Flashpoint 8:00PM (12/31/2008)
Let it die... or have Hyundai buy it and make Hyundais.
Hyundai should be able to make a killing in China with their Santa fe, Sonata and Genesis.
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Azark 8:03PM (12/31/2008)
If only SAIC wasn't just trying to take Ssanyong's technology...
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gtdrifter 8:33PM (12/31/2008)
SAIC took over Ssangyong in 2004 promising to spend more than billion dollars in R&D.
Instead of keeping that promise SAIC has transferred all of Ssangyong's technology to SAIC (including SUV platforms and diesel-hybrid project funded by the Korean government) without paying any royalty fees (over $100 million initially promised).
...and now they're getting ready to ditch the company. Can SAIC's true intention be obvious enough?
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imoore 1:26PM (1/01/2009)
I hope I'm wrong, but Ssangyong's problems may be just part of a bigger problem within SAIC. I've heard that its attempts to make its Roewe brand into a major player in the Chinese market is falling flat on its face and that its takeover of Nanjing-MG was a bad idea, because neither Roewe or MG are selling well. Its only cash cows are the joint ventures with GM and Volkwagen, and the money generated from that is not enough to keep the entire company afloat, so they're using their cash reserves to prop up the home brands, and not support Ssangyong, which has been a money pit for several years now. SAIC would rather let Ssangyong go bust, just to keep the rest of the company stay alive. We may be preparing to see the first major Chinese automaker crash and burn before the end of 2009, and not because of a failed safety test.
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Shiftright 5:35PM (1/01/2009)
SSangyong should be left to go under for making the ugliest car in the world: The Rodeus (Rhymes with odious). Yes, it's uglier than an Aztek. But seriously gtdrifter is right. SAIC is being shifty, as par for the course...
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