Full Payment Including Deposit Completed
[Asia Economy Reporter Kiho Sung] KG Group has completed the payment of the remaining balance for the acquisition of Ssangyong Motor. Now, only the approval of the rehabilitation plan remains to conclude the acquisition process. If creditors and shareholders agree on the Ssangyong Motor rehabilitation plan at the creditors' meeting, the Seoul Bankruptcy Court will approve the plan, finalizing the acquisition procedure.
According to the automotive industry on the 21st, the KG consortium paid Ssangyong Motor 331.9 billion KRW on the afternoon of the 19th, excluding the deposit. With the full payment completed, the creditors' meeting is scheduled to be held as planned on the 26th of this month.
The KG consortium initially proposed an acquisition price of 335.5 billion KRW but increased the acquisition price by 30 billion KRW ahead of the creditors' meeting to raise the repayment rate for rehabilitation claims. The total acquisition price rose to 365.5 billion KRW. With the 30 billion KRW increase, the cash repayment rate for rehabilitation claims improved from 6.79% to 13.97%, and the effective repayment rate considering the value of equity conversion shares improved from 36.39% to 41.2%.
Ssangyong Motor submitted a revised rehabilitation plan reflecting the changes in the repayment rate to the court on the 18th. To receive the court's final approval at the creditors' meeting, the plan must obtain the consent of at least three-quarters of the secured creditors, two-thirds of the rehabilitation creditors, and half of the shareholders.
The key issue appears to be whether the rehabilitation creditors will agree, which will determine the approval of the rehabilitation plan. Among Ssangyong Motor's rehabilitation claims totaling 565.5 billion KRW, trade claims account for 302.6 billion KRW, the majority. Therefore, if the trade creditors' approval rate is high, the rehabilitation plan is likely to be passed at the creditors' meeting.
The trade creditors' representative group, consisting of about 340 Ssangyong Motor partner companies, expressed support for the rehabilitation plan on the 11th and began persuading member companies. By the 19th, more than half of the member companies had submitted consent forms (power of attorney) for the rehabilitation plan to the creditors' group.
The trade creditors' group is encouraging partner companies to submit power of attorney forms to secure consent from 67% of rehabilitation creditors, but some foreign companies and mid-sized parts suppliers are reportedly still undecided.
In the case of foreign companies, the Korean branch cannot decide on approval or disapproval of the rehabilitation plan, and the headquarters must make the decision, so it is expected to take some time.
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