SEOUL Dec 17 A South Korean court on Thursday
backed Ssangyong Motor Co's (003620.KS) rescue plan, which had
been opposed by its majority owner China's SAIC Motor Corp
(600104.SS), the automaker said.
Ssangyong shares rose as much as 14 percent on the report
after earlier tumbling the daily limit of 15 percent. The shares
were suspended in late afternoon trading and will resume on
The ruling gives some breathing space to the South Korean
automaker, whose already troubled finances were compounded by the
global economic slump and an often violent 2-½ month strike
which ended in August.
Ssangyong said in a statement that it aimed to return to
profit within three years.
The maker of sports utility vehicles turned in an 89.8
billion won ($76.63 million) loss in the third quarter, almost
three times the loss in the same quarter last year, while sales
plunged to about a third of the year earlier level.
The court verdict will come as a relief to the government,
which has made job creation its top priority as Asia's fourth
largest economy emerges from the global crisis.
Ssangyong employs more than 7,000 workers and in September
put forward a rescue plan that included a capital writedown that
would slash the 51.33 percent stake of its major stakeholder
An SAIC spokeswoman in Shanghai said it had no comment on the
Ssangyong said it sought an initial write 5-for-1 writedown
of SAIC's shareholding with a further writedown planned. Other
shareholders would see their holdings written down at 3-to-1
initially, it added. [ID:nSEO195161]
It plans to conduct another 3-to-1 writedown for all
shareholders in January.
Ssangyong has been in court receivership since February,
leaving SAIC to write off a huge amount of its four-year old
investment, the highest profile Chinese overseas auto acquisition
Under the proposal, Ssangyong's major creditors would swap
part of their receivables for new Ssangyong shares. It has total
debts of 1.2 trillion won, a company spokesman said.
Ssangyong is seeking to swap 378.5 billion won of that for
equity, slightly down from an initial 393.3 billion won.
(Additional reporting by Rujun Shen; Writing by Jonathan
Thatcher; Editing by Jonathan Hopfner)