Mahindra & Mahindra’s South Korean Subsidiary SsangYong Motor Misses Loan Repayment Of $55Million
Being hit by the pandemic, the South Korea-based company has outstanding loans aggregating Rs 680 crore.
On Tuesday, in a stock exchange notification, Mahindra and Mahindra stated that the company’s South Korean subsidiary, Ssangyong Motor Co has missed repayment of $55 million (Rs.480 crore) to JPMorgan Chase Bank, South Korea, which was due on December 14. They also added that it would act as a creditor to SYMC.
Being hit by the pandemic, the South Korea-based company has outstanding loans aggregating Rs 680 crore. Besides JPMorgan, the loan also includes approximately Rs 68 crore from BNP Paribas and Rs 204 crore from Bank of America. Earlier in 2010, Mahindra and Mahindra had rescued the sports utility vehicle (SUV) maker from near-insolvency, however, it struggled to save the company’s fortunes. Since June, M&M is looking for a buyer for all or most of its 75 per cent stake in the company.
Adding to their statement M&M revealed that on payment of dues by the company to banks, it will be subrogated to all the rights of banks against SYMC. It will also step into the shoes of the banks as a creditor, and be entitled to all rights which the banks had against SYMC, with respect to these pending loans. Being an equity holder in the company, M&M will acquire all the rights of bankers. Analysts stated in the event that the company is not able to find a partner and SYMC proceeds for bankruptcy, it will be tough for M&M to recover the money it lent to SYMC.
The shares of M&M fell as much as 1.5 per cent on Tuesday to their lowest since November 23, while those of Ssangyong fell up to 7.72 per cent.
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