SEOUL, South Korea — After several delays, the Seoul Central District Court late last week approved SsangYong Motor Company's business revival plan.
The court overruled the objections of several overseas bondholders that had rejected the company's proposed restructuring plan and had been pressing for liquidation.
The latest move enables the troubled automaker to forge ahead with its three-year revival strategy and seek additional financing from outside investors.
In September, SsangYong presented the first phase of its plan, calling for a restructuring of shares and debt, including a reduction in the stake held by China's Shanghai Auto (SAIC) from 51 to 11 percent. At the time, SsangYong proposed a long-range strategy to reorganize the company, repay debt and return to profitability.
In its December 17 ruling, the court said the revised restructuring plan would "protect the interests of the majority."
SsangYong was granted court bankruptcy protection in February after SAIC withdrew its financial support. The company later weathered a devastating 77-day strike, eventually negotiating a new labor agreement with key concessions from its union.
In a statement, the automaker said the court's approval of its revival plan "will allow the reduction of capital, conversion of investment and repayment of debt, which will also make a huge improvement on financial soundness and capital structure and revitalize the business activities."
SsangYong said it aims to raise its quality, cost and efficiency to the level of its competitors, and triple revenues over this year's depressed level.
Inside Line says: The next move for SsangYong is to launch an aggressive program to renew and upgrade its product portfolio. — M.J. Lee, Correspondent
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