[Asia Economy Reporter Suyeon Woo] Senior executives of Mahindra, the major shareholder of Ssangyong Motor, will visit Korea on the 16th to discuss support measures for Ssangyong Motor with the government.
According to Ssangyong Motor and industry sources on the 15th, Pawan Goenka, Chairman of Mahindra, is scheduled to visit Ssangyong Motor's Pyeongtaek headquarters on the morning of the 16th. During his two-day visit, Chairman Goenka is expected to meet with Ssangyong Motor’s labor and management, the main creditor bank Korea Development Bank, and government officials to reaffirm Mahindra’s investment commitment and request cooperation.
As the vote on the self-rescue plan by Ssangyong Motor’s labor and management, who are experiencing financial difficulties, has concluded, attention has naturally shifted to Mahindra, the major shareholder. Ssangyong Motor has applied for loan extensions from financial institutions including Korea Development Bank while preparing the self-rescue plan. With the conditions requested by Mahindra met, the ball has now moved to Mahindra, which holds the decision-making power for additional investment.
During this visit, Chairman Goenka is expected to discuss Ssangyong Motor’s recovery plan with labor and management, Korea Development Bank, the Presidential Committee on Jobs, and the Economic and Social Development Commission. In particular, there is a high possibility that he will request a loan extension from Korea Development Bank, the main creditor bank.
Earlier, Ssangyong Motor’s labor union visited India at the end of last year and conveyed that Mahindra was considering investment support of about 200 billion KRW. However, at that time, Mahindra attached a conditional clause to the investment, requiring 'support from Korea Development Bank.' In this meeting, Korea Development Bank and Mahindra are expected to confirm each other’s positions and decide on additional support.
The labor union’s strong preparation of the self-rescue plan is also expected to influence Mahindra’s decision. Ssangyong Motor announced management innovation plans twice last year, in September and December, including reductions in bonuses, performance incentives, and welfare benefits.
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