[wheelguy]

SsangYong Motor sells Seoul service centre to raise funds - Link

The company recently signed an annual wage deal with its union, to put off the annual wage increase for the company over the next one year.

In the face of rising debts and mounting losses, SsangYong Motor has managed to sell one of its service centres located in the Guro district in Seoul to an asset management company PIA Investment Management. Through this sale it has managed to raise close to 147 million dollars as the korean auto major faces severe liquidity issues, according to reports in a section of Korean media. The service center is being sold on the condition that SsangYong Motor will continue leasing it for the next three years.

Infact SsangYong Motor's external auditor has refused to sign the financial statement, citing discrepancies and its doubtful existence.

This is the second non-core asset SsangYong Motor has sold this year for more liquidity as it inches towards bankruptcy, say sources.

With the company seeing poor sales over the last couple of years and Mahindra unable to turnaround the company in spite of ten years of management, a possible stake sale could also work out , say sources. Given the current global pandemic and the non reluctance of the company’s board to infuse any fresh long term funds, Mahindra may just be ready to sell at a decent price. M&M had paid Rs 2,100 crore ($463 million) for the purchase of the Korean car maker a decade ago. But each passing year has been tough with falling sales numbers and negative financial records.

The company’s labor and management is understood to have reached out for help from the government and Korea Development Bank, but sources say it is yet to receive any response as the government is keen to fund only those companies affected by Covid, not otherwise.

Ssangyong needs to stay afloat and its short-term borrowings due to mature this year stand at 254 billion won, much more than 40 billion won that was recently injected by Mahindra, SsangYong’s parent company in India. However it's immediate concern is to repay 90 billion won to Korea Development Bank this July. Ssangyong reported a net loss of 157 mn US dollars for the first quarter of 2020, it's 13th consecutive quarterly loss.