A deterioration in money move has forced the money strapped SsangYong Motor organization to hold off wage payments for the months of January and February. The Korean major has sent an formal letter to the labour union to set off wage payments for these two months as the liquidity difficulties worsened, explained stories emanating from Korea.
The inability to pay out suppliers also forced the organization to shut down the Pyeongtaek plant for two times in 2020. Meanwhile, the conclusion of a strategic stake sale is anticipated by the finish of this thirty day period with Haah Automotive, a US car or truck distributor supposedly in progress ranges of discussion, say knowledgeable resources.
In April 2020 SsangYong Motors signed an annual wage deal involving the organization and its union. The wage deal then assumed importance amid the growing effects of the coronavirus outbreak as effectively as the Korean car or truck business going by way of a single of its worst phases. Gross sales have plummeted to an all-time reduced and a secure labour-administration romantic relationship is vital nowadays.
Amidst the ongoing Covid 19 pandemic, the Mahindra board previously this thirty day period determined to shelve its designs to infuse $four hundred million fairness in SsangYong to satisfy its future three 12 months prepare.
The Korean major has sent an formal letter to the labour union to set off wage payments for these two months as the liquidity difficulties worsened.~
M&M experienced compensated Rs two,a hundred crore ($463 million) for the order of the Korean car or truck maker a ten years back. But each and every passing 12 months has been tough with falling income figures and adverse economic information.
KDB is willing to inject further funds into the ailing organization supplied Ssangyong’s the vast majority shareholder, Mahindra retains its the vast majority stake, explained folks in the know. Though this goes in opposition to Mahindra’s intention of disposing of its stake, the state run creditor insists that Mahindra stay as the major shareholder till the compensation of the new funds is carried out. Mahindra on its portion has indicated its willingness to continue their present ensures for overseas lender loans for a for a longer period time period.
With the court allowing for SsangYong Motor to undertake autonomous restructuring assistance (ARS) till February 28 ahead of putting it on a corporate rehabilitation software, the Korean automaker is getting out ways to survive and is in continuous discussion with KDB, Mahindra and the potential investor.
SsangYong’s union head was in India during the last quarter of 2019 to obtain a remedy to the present impasse as effectively as to examine lengthy phrase strategy. It is recognized that the company’s lengthy phrase advancement as effectively as future auto strategy were being locations which were being discussed on. With the organization now looking at tough instances, workers at SsangYong have not long ago approved a lower in bonuses and other price saving actions proposed by the organization.