SsangYong Motor Co., the south Korean subsidiary of Mahindra & Mahindra Ltd., filed for bankruptcy after it failed to repay loans worth Rs 680 crore to lenders including JPMorgan Chase, Bank of America and BNP Paribas.
SsangYong on Monday filed an application for commencement of rehabilitation procedure with the Seoul Bankruptcy Court under the Debtor Rehabilitation and Bankruptcy Act of South Korea, the carmaker said in a regulatory filing to the Korean Stock Exchange.
That comes a week after M&M informed that it had missed repayment of loans aggregating around 60 billion won, or Rs 408 crore due by Dec. 14, taking the total outstanding loan to Rs 680 crore or 100 billion Korean won.
The company applied for an autonomous restructuring support programme, a court-designed process. The parent said in the filing that if the court approves the restructuring, SsangYong will continue to function under the supervision of its board and will negotiate with stakeholders to reach an understanding about a revival package, which may include equity and debt financing and other related actions.
Now, the bankruptcy court will deliberate and review the application and relevant documents submitted by SsangYong to determine whether or not the court will commence the restructuring process, M&M said in a filing.
M&M in September had informed that over 98% shareholders had approved the company's decision to transfer, dilution or cessation of controlling stake in its Korean subsidiary after it failed to turn it around even nearly a decade after acquisition.
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