Byeongtae Ye, CEO of Ssangyong Motor: "Worst Emergency Since Court Receivership... Requesting Support from Government and Financial Sector"

"KRW 230 Billion Support Is Not Emergency Fund but Resources Needed Over the Next 3 Years"

Ye Byeong-tae, President and CEO of Ssangyong Motor (Photo by Ssangyong Motor)

[Asia Economy Reporter Kim Ji-hee] Ye Byeong-tae, CEO of Ssangyong Motor, announced on the 6th that he would "request support from the government and financial institutions" regarding the withdrawal of investment commitments by the major shareholder, India's Mahindra Group.

In a statement sent to employees at the Pyeongtaek plant that morning, CEO Ye said, "The plan to lay the foundation for corporate recovery through financial support from the government and the major shareholder has encountered unexpected difficulties." Earlier, Mahindra held a special board meeting on the 3rd and decided to withdraw its commitment to provide 230 billion KRW in funding to Ssangyong Motor. However, to overcome the short-term liquidity crisis and ensure continuity of business operations, it decided to provide 40 billion KRW over three months.

Regarding the background of Mahindra Group's decision, it was explained that due to the COVID-19 pandemic, India implemented an unprecedented 21-day nationwide lockdown, and the group itself is facing a severe cash crunch to the extent that it must receive financial support from financial institutions.

He stated, "The withdrawal of Mahindra's financial support must be very frustrating and disappointing from the employees' perspective," and expressed that he also feels deeply saddened.

He added, "The 230 billion KRW support promised by Mahindra is not emergency funds needed immediately this year but resources required for company operations over the next three years," emphasizing, "The company will do its best to overcome the liquidity crisis by requesting support from the government and financial institutions based on close cooperation with the labor union."

He also conveyed his determination to ensure that recent efforts to suspend welfare benefits and reduce wages will not be in vain.

CEO Ye stated, "The company is currently facing the worst emergency since the 2009 court receivership," and expressed his sincere apology, saying, "As the CEO responsible for management, I sincerely apologize for the current crisis."