A South Korean court just approved a plan to keep SsangYong Motor (SYMC) out of liquidation. In granting its approval the court agreed with a recent report that showed SsangYong is worth more alive than dead. After entering their version of Chapter 11 back in February, the company was faced with liquidation unless they came up with a convincing argument that they could turn things around.
According to the PriceWaterhouse report, the liquidated value wouldn't be nearly as great as a restructured, lean-and-mean automaking SsangYong. The final restructuring report needs to be completed by mid-September, but is already going well apparently. The new plan includes a significant reduction in workforce and a new model range, starting with the diesel-hybrid Eco C200 CUV, that should be out late this year. Full press release after the jump.
SSANGYONG MOTOR GETS GO AHEAD TO RESTRUCTURE
SsangYong Motor (SYMC) today cleared a significant hurdle in its restructuring plans when a South Korean court gave its approval to put the plans into action.
The court confirmed a recent Samil PricewaterhouseCoopers assessment that the manufacturer had a greater value as a going concern than its liquidated value, and ordered SsangYong to submit its full restructuring plan by mid-September. Much of this is already in place, including a vital new model programme and a reduction in the workforce by over a third.
Paul Williams, managing director of distributor Koelliker UK Ltd. said: "This is the news we were hoping for and it means that SsangYong now has the lifeline it needs to implement major changes. The future will continue to be difficult, as it is throughout the auto industry, but the result should mean a leaner, much more efficient SsangYong. We already know that there will be a broader range of passenger cars using the latest petrol, diesel and hybrid technology, and the first – the C200 – will go into production later this year. Our dealers can now go forward with renewed confidence."
SsangYong applied for, and was granted court receivership in February after the fall-out of the international credit crunch, a drop in demand and even higher raw material, oil and energy prices. Court receivership is similar to US Chapter 11 status, giving the company protection fromcreditors and time to formulate and implement a corporate resuscitation plan. Under the arrangements, the court appointed former Hyundai Motor president Lee Yoo-il, and SYMC vice-president in charge of finance, Park Young-tae as co-legal administrators.
Despite these uncertainties, SYMC has forged ahead with the development of the new C200 'compact urban vehicle,' showing it at the Seoul Motor Show and most recently at the Barcelona Motor Show earlier this month. Styled in Europe, the C200 is a new monocoque design engineered for both front and four wheel drive, with advanced petrol, diesel and diesel hybrid engine options. It is scheduled for production later this year.
In the UK, the SsangYong line-up of Kyron, Rexton and Rodius passenger cars starts at £14,995 with light commercial versions of the Kyron and Rexton also available. SsangYong is fully participating in the government scrappage scheme which offers £2,000 off of a new car when an old (10 years old or more) car or van is traded-in for scrap.