KG Chairman Kwak Jae-sun, Who Completed Ssangyong Motor Acquisition, to Serve as CEO Personally

Ssangyong Motor Changes Co-CEOs to Gwak Jaeseon and Jeong Yongwon

Kwak Jae-sun, Chairman of KG Group, is speaking at the Ssangyong Motor Chairman inauguration ceremony held on the 1st.

[Asia Economy Reporter Choi Dae-yeol] Kwak Jae-sun, chairman of KG Group, has been appointed as the CEO of Ssangyong Motor. This comes as he recently completed the acquisition process and intends to take direct responsibility for management as the largest shareholder.

On the 29th, Ssangyong Motor announced that the CEO position changed from former President Ye Byeong-tae to Chairman Kwak Jae-sun and current manager Jeong Yong-won. After KG Group was finally selected as the acquirer of Ssangyong Motor, it has recently undergone procedures such as a paid-in capital increase according to the rehabilitation plan. The largest shareholder of Ssangyong Motor has changed from Mahindra to KG Mobility.

Earlier this month, Chairman Kwak emphasized upon his inauguration as Ssangyong Motor chairman that the company must become a "sustainable company" and a "company that enriches the world." It is not uncommon for an owner-chairman who is the largest shareholder to be directly involved in the management of a newly acquired company. However, since the rehabilitation process is still ongoing and many challenges remain, Chairman Kwak personally taking on the CEO role is seen as a strong indication of his determination to accelerate the normalization of Ssangyong Motor.

Previously, the Seoul Bankruptcy Court held a creditors' meeting on the 26th of last month and approved Ssangyong Motor's rehabilitation plan. Ssangyong Motor, which has transitioned to a co-CEO system, plans to apply for the conclusion of the corporate rehabilitation process next month.

With the recent successful launch of the new model Torres, Ssangyong Motor has improved its factory operating rate, and the company's situation is improving both internally and externally. Nevertheless, it is still too early to be optimistic. Industry experts believe that the two or three new models currently under development must also be successfully launched to double the annual production volume from the current level to achieve profitability. The company’s annual production volume has steadily declined from about 156,000 units in 2016 to just around 82,000 units last year.

Chairman Kwak has grown his business by acquiring and quickly normalizing distressed companies through mergers and acquisitions (M&A). This is why the industry regards him as an M&A strategist. This is his first venture into the complete vehicle manufacturing sector, which is known for its enormous development costs and complex supply chain management. Given the recent worsening domestic and international economic conditions and numerous intertwined variables, the environment is challenging.