Cash strapped SsangYong delays wage payments, Auto News, ET Auto

A deterioration in hard cash movement has pressured the hard cash strapped SsangYong Motor company to delay wage payments for the months of January and February. The Korean major has sent an official letter to the labour union to set off wage payments for these two months as the liquidity troubles worsened, stated studies emanating from Korea.

The inability to shell out suppliers also pressured the company to shut down the Pyeongtaek plant for two days in 2020. In the meantime, the final decision of a strategic stake sale is envisioned by the close of this thirty day period with Haah Automotive, a US automobile distributor supposedly in advance amounts of discussion, say informed sources.

In April 2020 SsangYong Motors signed an annual wage offer concerning the company and its union. The wage offer then assumed importance amid the mounting effects of the coronavirus outbreak as perfectly as the Korean automobile business heading via one particular of its worst phases. Income have plummeted to an all-time reduced and a stable labour-management partnership is critical now.

Amidst the ongoing Covid 19 pandemic, the Mahindra board previously this thirty day period resolved to shelve its options to infuse $400 million equity in SsangYong to fulfill its up coming three calendar year strategy.

The Korean major has sent an official letter to the labour union to set off wage payments for these two months as the liquidity troubles worsened.~

M&M had paid out Rs two,one hundred crore ($463 million) for the buy of the Korean automobile maker a ten years in the past. But each and every passing calendar year has been challenging with slipping revenue numbers and unfavorable financial records.

KDB is ready to inject supplemental money into the ailing company provided Ssangyong’s the vast majority shareholder, Mahindra retains its the vast majority stake, stated folks in the know. Whilst this goes towards Mahindra’s purpose of disposing of its stake, the state operate creditor insists that Mahindra continue being as the biggest shareholder until the reimbursement of the new money is accomplished. Mahindra on its aspect has indicated its willingness to go on their current assures for international lender financial loans for a more time period of time.

With the court docket permitting SsangYong Motor to undertake autonomous restructuring assist (ARS) until February 28 prior to placing it on a company rehabilitation software, the Korean automaker is finding out ways to endure and is in continuous discussion with KDB, Mahindra and the opportunity investor.

SsangYong’s union head was in India during the previous quarter of 2019 to uncover a answer to the recent deadlock as perfectly as to explore very long expression method. It is understood that the company’s very long expression progress as perfectly as foreseeable future vehicle method ended up regions which ended up talked about upon. With the company now seeing challenging moments, workers at SsangYong have not too long ago recognized a minimize in bonuses and other charge saving actions proposed by the company.