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Could it be too late for Ssangyong? Shanghai Automotive Industry Corp. (SAIC) appears to have given up on Ssangyong Motor Co., allowing the company to slip into receivership. SAIC holds a 51% stake in Ssangyong, but gave up management rights in a bid to avoid liquidation and allow Ssangyong some time to get back in the black. The Korean automaker's Chief Executive Zhang Hai Tao and President Choi Hyung-tak both stepped down after the filing.

As recently as a couple of days ago, SAIC said they would help prop up Ssangyong, but that apparently has changed. As vehicle sales have fallen a whopping 50%, money was clearly tight. With the global economic crisis, credit was evidently unavailable to pay workers and new negotiations with the unions weren't going anywhere fast. This receivership agreement protects Ssangyong from creditors and keeps it from entering bankruptcy, allowing it some time to get back on its feet. For its part, SAIC said that it "will work with all parties so that Ssangyong can achieve a plan to normalize its operations." Thanks for the tip, Ken!

[Source: Market Watch]

Ssangyong enters receivership originally appeared on Autoblog on Fri, 09 Jan 2009 17:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>saicshanghai automotiveshanghai automotive industry corpshanghai automotive industry corporationShanghaiAutomotiveShanghaiAutomotiveIndustryCorpShanghaiAutomotiveIndustryCorporationssangyongSsangyong Motor Cossangyong motorsSsangyongMotorCoSsangyongMotorsFri, 09 Jan 2009 17:29:00 EST<![CDATA[Ssangyong faces liquidation if SAIC doesn't prop up ailing automaker]]>http://www.autoblog.com/2008/12/31/ssangyong-faces-liquidation-if-saic-doesnt-prop-up-ailing-autom/http://www.autoblog.com/2008/12/31/ssangyong-faces-liquidation-if-saic-doesnt-prop-up-ailing-autom/http://www.autoblog.com/2008/12/31/ssangyong-faces-liquidation-if-saic-doesnt-prop-up-ailing-autom/#commentsFiled under: ,

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]

Ssangyong faces liquidation if SAIC doesn't prop up ailing automaker originally appeared on Autoblog on Wed, 31 Dec 2008 16:59:00 EST. Please see our terms for use of feeds.

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