Legal Management Imminent for Ssangyong Motor... President Ye Byeong-tae Announces Resignation

Ye President "Responsible for Investment Attraction Failure"
Asset Revaluation of Pyeongtaek Factory Site

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor is expected to enter corporate rehabilitation proceedings (court receivership) as early as the 8th after failing to submit a Letter of Intent (LOI) for investment from HAAH Automotive. In response, Ssangyong Motor CEO Ye Byeong-tae announced his resignation on the 7th, taking responsibility, and stakeholders surrounding Ssangyong Motor are becoming increasingly active.

On the same day, CEO Ye convened an emergency executive meeting and expressed his intention to resign, taking responsibility for the failure to attract investment from HAAH Automotive and the initiation of court receivership. Ye said, "The decision to commence rehabilitation proceedings is imminent due to delays in attracting new investors beyond the planned schedule," adding, "Regardless of the reasons, as the company’s representative, I deeply feel responsible for the company facing rehabilitation proceedings once again."

If Ssangyong Motor undergoes court receivership, CEO Ye would normally serve as the court-appointed manager, but with his resignation on this day, Executive Director Jeong Yong-won, Head of Planning and Management, is expected to take on the role. However, Ssangyong Motor explained that "a successor has not yet been decided."

Separately from HAAH’s investment, Ssangyong Motor conducted an asset revaluation to prevent delisting and enhance corporate value. The book value of the Ssangyong Motor Pyeongtaek plant site was KRW 402.57 billion on the consolidated financial statements at the end of last year, but through asset revaluation, it increased to KRW 681.37 billion, generating a gain of KRW 278.8 billion. With this, Ssangyong Motor, which has emerged from a state of capital erosion, plans to file an objection to the delisting procedure with the Korea Exchange.

As a financial creditor and Ssangyong Motor’s main creditor bank, the Korea Development Bank will also submit a response letter expressing its opinion on the commencement of court receivership. This letter will include consent to the initiation of court receivership and inquiries regarding the appointment of the manager and investigation committee members. The Cooperative Association, a group of Ssangyong Motor’s partner companies, plans to dissolve the association and convert it into a trade creditor group simultaneously with the start of court receivership.

Currently, about 350 companies hold trade claims against Ssangyong Motor. Meanwhile, electric bus manufacturer Edison Motors, electric two-wheeler company K-pop Motors, and Park Seok-jeon & Company, an affiliate of private equity firm Hyunlim Partners, have stepped forward to acquire Ssangyong Motor.