SEOUL, July 6 (Yonhap) -- The main creditor bank of SsangYong Motor Co. on Monday rolled over the carmaker's 90 billion won (US$7.5 million) worth of debt maturing this month to help it stay afloat amid the new coronavirus outbreak.
The state-run Korea Development Bank (KDB) extended the deadline for the payment of 70 billion won maturing on Monday and 20 billion won maturing on July 19 to the end of this year, a KDB spokesman said over the phone.
KDB Executive Director Choi Dae-hyon said last week that it will be hard to extend a fresh loan to SsangYong Motor, but it won't retrieve existing loans from the carmaker if foreign financial institutions roll over their debts to the carmaker.
As of Monday, SsangYong Motor has 199 billion won worth of short-term debt that has to be paid back to the KDB and foreign lenders such as JP Morgan, BNP Paribas and Bank of America within the next 12 months.
SsangYong Motor has struggled with declining sales due to a lack of new models and Mahindra's recent decision not to inject fresh capital into the Korean unit.
Mahindra said earlier this year it will inject 230 billion won into SsangYong for the next three years after obtaining approval from its board. But its board voted against the investment plan in April, as the COVID-19 pandemic continues to affect vehicle sales in global markets.
Instead of the proposed 230 billion won, Mahindra said it would consider a "special one-time infusion" of up to 40 billion won over the next three months to help SsangYong continue operations.
The one-time cash injection falls far short of the 500 billion won Goenka had said is needed to turn SsangYong around by 2022.
SsangYong continued to report net losses in the past 13 quarters through the first quarter of this year.
In the first quarter, its net losses deepened to 193.54 billion won from 26 billion won a year earlier. Its sales from January to May fell 32 percent to 39,206 vehicles from 58,030 a year ago.
From January to June, the SUV-focused carmaker's sales fell 28 percent to 49,387 vehicles from 68,189 units in the year-ago period.
Its lineup consists of the flagship G4 Rexton, as well as the Tivoli, Korando and Rexton Sports.
In 2011, Indian carmaker Mahindra & Mahindra Ltd. acquired a 70 percent stake in SsangYong Motor for 523 billion won. Mahindra currently owns a 74.65 percent stake in the SUV-focused carmaker.
Mahindra is in the process of selling the South Korean unit by picking a lead manager for a potential exit from the loss-making affiliate, according to industry sources.
Last month, Mahindra hinted at the possibility of giving up control of SsangYong Motor, as its Managing Director Pawan Goenka said that SsangYong needs a new investor and that Mahindra is working with the company for that purpose.
Mahindra's Deputy Managing Director Anish Shah reportedly said the Indian company will not remain the biggest shareholder if an investor purchases a controlling stake in SsangYong.
Seoul's last-ditch home supply plan still in doubt over its viability
Korean foodmakers ramp up overseas push amid COVID-19 pandemic
Bumpy road lies ahead for Samsung, even after heir avoids detention
One month into eased social distancing, S. Korea wrestles with cluster infections, cases with unknown routes
Virus outbreak sheds light on overlooked side of highly touted 'fast' delivery services