SsangYong Motor's net losses narrow in Q1 on exports

Economy 16:41 May 16, 2022

SEOUL, May 16 (Yonhap) -- SsangYong Motor Co., the South Korean unit of Indian carmaker Mahindra & Mahindra Ltd., said Monday its net losses narrowed in the first quarter on increased exports.

Net losses for the three months ended in March narrowed to 31.61 billion won (US$246 million) from 86.29 billion won during the same period of last year, the company said in a statement.

Increased shipments of the Rexton Sports SUV and the Rexton Sports Khan SUV and companywide cost reduction helped reduce the size of net losses, it said.

Operating losses also narrowed to 30.86 billion won in the first quarter from 84.73 billion won a year ago. Sales rose 33 percent to 714.03 billion won from 535.83 billion won during the same period.

SsangYong has been under court receivership since April 15, 2021, after its parent Mahindra failed to attract an investor amid the COVID-19 pandemic and its worsening financial status.

On Friday, the Seoul Bankruptcy Court selected a local consortium led by chemical-to-steel firm KG Group as the preliminary bidder for SsangYong ahead of the auction beginning later this month to find a new investor for the carmaker.

The new auction comes two months after local electric bus maker Edison Motors Co. failed to make a full payment of 304.8 billion won for the debt-laden SsangYong Motor by the March 25 deadline.

The latest deal's collapse marks yet another setback for the SUV-focused carmaker.

China-based SAIC Motor Corp. acquired a 51 percent stake in SsangYong in 2004 but relinquished its control of the carmaker in 2009 in the wake of the global financial crisis.

In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.

SsangYong's lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.

SsangYong aims to select a preferred bidder at the end of June, sign a deal in early July, submit its rehabilitation plan to the court in late July and obtain the court's approval for its restructuring plan in late August.