Ssangyong Motor Labor and Management Unite to Prevent Delisting... "Successful Sale Could Overcome Capital Impairment" (Comprehensive)

Labor and Management to Submit Petition and Appeal to Exchange on the 21st

On the 21st, Ssangyong Motor labor and management submitted a petition and appeal to the Korea Exchange to extend the improvement period for delisting. The photo shows Seon Mokrae, Chairman of the Ssangyong Motor Labor Union (third from the left in the front row), and Park Jangho, Head of Production Headquarters (second from the right). Photo by XXX

[Asia Economy Reporter Yoo Hyun-seok] The labor union and the company of Ssangyong Motor have joined forces to prevent the delisting of the company. Currently, Ssangyong Motor is in a state of complete capital erosion and has received an auditor's refusal, making the possibility of delisting from the KOSPI market very high.

On the 21st, the Ssangyong Motor labor and management held a press conference in front of the Korea Exchange Seoul office in Yeouido, Seoul, stating, "We petition for an extension of the improvement period to resolve the reasons for delisting."

On this day, Seon Mok-rae, chairman of the Ssangyong Motor labor union, submitted a petition and appeal letter to the exchange requesting an extension of the delisting improvement period, including requests from the company, Jeong Jang-seon, mayor of Pyeongtaek, and the Pyeongtaek Chamber of Commerce. Notably, the company side was also involved, with Park Jang-ho, head of the production division (executive director), participating alongside the labor union.

Ssangyong Motor faced delisting reasons due to the auditor's refusal of the 2020 financial statements and was granted a one-year improvement period. However, during this period, it failed to attract investors and improve its financial structure to resolve the delisting reasons, and again received an auditor's refusal last year.

Chairman Seon emphasized, "The acquisition of Ssangyong Motor fell through as the buyer failed to pay the acquisition price," adding, "Ssangyong Motor is once again facing the risk of delisting as the improvement period to resolve the delisting reasons has ended."

He stressed that if a delisting decision is made for Ssangyong Motor, it would cause significant obstacles to resale. He said, "This is directly related to the survival of 50,000 small shareholders and 200,000 workers including partner companies," and warned, "If delisted and resale fails, it could trigger a terrible aftermath of bankruptcy, leading to an irreversible catastrophe."

[Image source=Yonhap News]

He emphasized the need to extend the improvement period as a successful sale of Ssangyong Motor could help the company escape capital erosion. He explained, "Maintaining Ssangyong Motor's listing is an absolute condition for the company's normalization through resale," adding, "If the sale succeeds, it can overcome the capital erosion that is the cause of delisting."

Director Park also said, "If a new owner comes, capital will be expanded," and "This will sufficiently resolve the delisting conditions."

Jeong Jang-seon, mayor of Pyeongtaek, stated in the petition, "Since 2009, Ssangyong Motor has been a workplace without disputes or conflicts, leading labor-management harmony," and "In the company's management crisis, Ssangyong Motor workers have participated in pain-sharing through proactive self-help measures via a general meeting vote."

He explained, "The self-help measures include suspension of welfare for three years, a 20% wage cut for two years, and agreement to implement unpaid rotational leave every other month with the reduced wages," adding, "Moreover, although unpaid wages have reached 140 billion won, they agreed to defer the payment of these wages."

He emphasized, "For Ssangyong Motor to grow into a sustainable company, it must secure a competitive investor and complete the sale as soon as possible," adding, "However, maintaining the listing is essential to attract competitive investors, so we request an extension of the improvement period so that Ssangyong Motor can resolve the delisting reasons through the sale."

Currently, Ssangyong Motor's rehabilitation plan was excluded by the court after the investment contract with Edison Motors consortium was terminated. As a result, the company is undergoing a new sale process, aiming to complete all procedures by mid-October, the deadline for approval of the rehabilitation plan. The acquisition battle has narrowed down to four parties, including KG Group, Ssangbangwool, Billion Private Equity (PE), and ELB&T, who have submitted letters of intent.