[Asia Economy Reporter Suyeon Woo] Pawan Goenka, President of Mahindra, the major shareholder of Ssangyong Motor, which is experiencing management difficulties, met with Lee Dong-geol, Chairman of KDB Industrial Bank, to discuss the revival plan for Ssangyong Motor. Earlier that morning, Goenka reaffirmed his intention to invest approximately 230 billion KRW to the Ssangyong Motor labor union.
On the 16th, at 3 p.m., Goenka visited the headquarters of KDB Industrial Bank in Yeouido, Seoul, and held a meeting with Chairman Lee Dong-geol and other KDB Industrial Bank officials. Ssangyong Motor CEO Yae Byung-tae also attended the meeting.
The meeting, which lasted about two hours, did not result in any specific decisions and was largely a courtesy meeting. Ssangyong Motor emphasized the significance of conveying Mahindra’s investment intention to KDB and initiating discussions on related support measures. Goenka said, "Today’s meeting was a routine discussion, and there is nothing more to say beyond that."
Industry insiders believe that during the meeting, Goenka conveyed the major shareholder’s investment plan and likely discussed KDB’s loan extension or debt-to-equity conversion similar to the case of GM Korea.
Pawan Goenka, Chairman of the SsangYong Motor Board and President of Mahindra, visited the Korea Development Bank in Yeouido, Seoul on the 16th to discuss the SsangYong Motor management recovery plan. Photo by Yonhap News
Currently, Ssangyong Motor has borrowed about 190 billion KRW from KDB, of which 90 billion KRW is due in July. Previously, KDB extended the maturity of 20 billion KRW out of a 30 billion KRW loan that matured at the end of last year.
Meanwhile, that morning, Goenka met with the Ssangyong Motor labor union and reaffirmed the major shareholder’s investment intention. At an employee meeting held at the Pyeongtaek plant, Goenka reportedly stated that he would invest 230 billion KRW after board approval. He also repeatedly emphasized that it is difficult to specify the investment method but that he does not view Ssangyong Motor as a short-term investment.
Earlier, the Ssangyong Motor labor union visited India at the end of last year to confirm Mahindra’s investment intention. At that time, Mahindra stipulated that support from the main creditor bank, KDB, must be guaranteed.
On the other hand, KDB’s loan extension condition was a self-rescue plan for Ssangyong Motor’s business normalization. Accordingly, Ssangyong Motor’s labor and management prepared a high-intensity management reform plan last year in two phases, including bonus returns, welfare reductions, and rotational leave.
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