Mahindra’s South Korean Arm SsangYong Motors Files For Court Receivership

• The company filed for court receivership after defaulting on payment of up to 60 billion won (approximately Rs 400 crore).

• Mahindra currently owns a 75 percent stake in SsangYong Motors.

• Mahindra’s lineup includes the Alturas G4 and XUV300 based on the SsangYong G4 Rexton and Tivoli.

It's trying times on the horizon for Mahindra & Mahindra-owned SsangYong Motor Company, as the South Korean carmaker has filed for court receivership after defaulting on payment of loans up to 60 billion won (approximately Rs 400 crore). This is essentially one step short of bankruptcy under the South Korean legal system. In lieu of this, the carmaker has agreed to apply for an Autonomous Restructuring Support (ARS) programme.

ARS is essentially a private restructuring support programme made with the court that delays initiation of the company’s rehabilitation procedures by three months as it continues its private restructuring efforts. Within this timeframe, the usual day-to-day business will resume. Once a final agreement for restructuring is put in place, the rehabilitation procedure application is withdrawn and the company returns to its normal status without major effects.

During this ARS process, Mahindra will take responsibility as a major shareholder and cooperate with SsangYong for normalisation of the management via early conclusion of negotiations with interested parties. The carmaker acquired SsangYong Motors back in March 2011 and currently has a 75 percent stake in the company. That said, the carmaker has been ready to forego complete ownership of the South Korean brand if it can find a new investor. 

Currently, notable SsangYong models include the G4 Rexton, Tivoli, Korando and Rexton Sports. Back home, the G4 Rexton has been rebadged as the Alturas G4, whereas the XUV300 was based on the Tivoli. 

So what does this mean for the future of the two carmakers? As things stand, the two are working on introducing the electrified iteration of the Mahindra XUV300/ SsangYong E100 (Tivoli) for 2021. There’s also the facelifted Tivoli that runs on Mahindra’s mStallion 1.2-litre turbo-petrol engine from the upcoming XUV300 Sportz.