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Posted : 2021-06-02 11:20
The SsangYong Motor plant in Pyeongtaek / Yonhap
Financially troubled SsangYong Motor has offered unpaid leave and a wage cut to its employees in its efforts to stay afloat, industry sources said Wednesday.
SsangYong Motor, under court receivership, offered a two-year unpaid leave to half of its 4,732 employees, while demanding them to accept an extension of lower wages and suspended welfare benefits until June 2023, a person familiar with the matter told Yonhap News Agency over the phone.
The company also offered an additional 20 percent pay cut to executives whose wages have already been reduced by 20 percent, he said.
The cash-strapped carmaker is expected to invite tenders by next month and is likely to submit a restructuring programme by the first week of July. Ernst & Young Hanyoung has been appointed by the court to oversee the sale process
Ssangyong Motors may shed some senior executive jobs as part of cost cutting
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Synopsis
The Seoul Bankruptcy Court on April 15 approved the debt-rescheduling process for SsangYong Motor as the US-based HAAH Automotive did not submit an LoI by the March 31 deadline. Court receivership is one step short of bankruptcy in South Korea s legal system. In receivership, the court will decide whether and how to revive the company.
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A Ssangyong Motors launch event (2019 pic). M&M had bought the failed carmaker a decade ago.
Cash-strapped Ssangyong Motors plans to cut a few senior executive jobs even as it continues with its ongoing cost cutting drive, said people familiar with the matter.
Saving SsangYong Motor
Radical restructuring inevitable for troubled automaker
SsangYong Motor has been placed under court receivership once again. Last Thursday, the Seoul Bankruptcy Court approved corporate rehabilitation procedures for the automaker, ordering the company to submit a restructuring plan by July 1. The troubled SsangYong stands at a crossroads, with its fate resting in the hands of the court about a decade years after it emerged from a similar predicament in March 2011.
The carmaker s self-rescue plan is likely to include finding potential investors and a debt-rescheduling scheme. The court will conduct due diligence on the firm s financial status to figure out the size of its overall debt and decide if it would be better to keep it operating or to liquidate it. Some skeptics say it would be better to liquidate SsangYong, because the company owes its employees and subcontractors 370 billion won ($332 million).