Ssangyong Seeks Receivership on SUV Sales Collapse
Jan. 9 (Bloomberg) -- Ssangyong Motor Co., the South Korean unit of China’s largest automaker, filed for court receivership after plunging demand for sport-utility vehicles caused a 30 percent drop in annual auto sales.
The carmaker will also cut salaries by as much as 30 percent for the next two years, it said in a regulatory filing today. The company, based in Pyeongtaek, halted its shares from trading in Seoul.
Ssangyong had been threatened with liquidation after posting four straight quarterly losses amid slumping demand for SUVs, which account for about half of revenue. The automaker, a unit of SAIC Motor Corp., China’s biggest carmaker, needs 600 billion won ($451 million) of new financing to stay in business, according to Korea Development Bank, its biggest creditor.
The South Korean automaker owes about 240 billion won to Korea Development Bank, according to the lender. The bank said last year it might take steps toward liquidation rather than debt-restructuring if SAIC pulled out.
BLOOMBERG
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