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Mahindra subsidiary SsangYong Motor defaults, in talks with financers to rejig loans

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MUMBAI: SsangYong Motor Company (SYMC), the South Korean subsidiary of Mahindra & Mahindra (M&M), is in talks with banks to restructure and prolong moratorium of its excellent loans after the Korean main defaulted on the reimbursement of loans amounting to Rs 408 crore (Korean received 60 billion).

SsangYong did not repay the quantity to bankers together with JPMorgan Chase, BNP Paribas and Bank of America. Mahindra has put SsangYong on the block however has been unable to shut a cope with any potential investor. Sources within the know advised ET that the defaulted mortgage may have a damaging affect on any new investor strolling in at this second.

“We will continue to discuss the matter with the banks to extend the terms of the loans. We are still working on attracting new investment regardless of current matter,” SsangYong’s spokesperson mentioned. The firm has excellent loans aggregating Rs 680 crore which incorporates Rs 408 crore from JPMorgan, Rs 68 crore from BNP Paribas and Rs 204 crore from Bank of America.

In a press release to the bourses, Mahindra mentioned, “Whilst the company has made a commitment to cover the above-mentioned loans given by the banks, its final liability will be limited to the extent not recovered from SYMC.”

“Ssangyong could look at debt restructuring with its lenders, seek possible Covid-related reliefs from the Korean government or find a strategic investor for the distressed assets. If such options do not work out, then it may have to consider insolvency or bankruptcy options,” mentioned Sudip Mahapatra, companion at S&R Associates. Samjong KPMG issued a disclaimer of opinion for the third time for the automaker’s third quarter monetary assertion.

Mahindra is in talks with US distributor Haah Automotive for a stake sale.

Sources mentioned a deal might shut quicker as now SYMC could be beneath large strain to seek out an investor, preferring to promote at decrease valuations.




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