Mahindra's Ssangyong Defaults On Rs. 408 Crore Loan Repayment To 3 Different Banks

Home-grown utility vehicle manufacturer, Mahindra and Mahindra, has announced that its South Korean unit, Ssangyong Motor Company, has defaulted on loan repayments of about 60 billion Korean Won (KRW) or approx. Rs. 408 crore, to three different financial institutions. In its Bombay Stock Exchange (BSE) filing, Mahindra states that out of the total amount, which was due on December 14, 2020, SsangYong was supposed to pay about 20 billion Won (Rs. 136 crores) to JP Morgan, 10 billion Won (Rs. 68 crore) to BNP Paribas, and 30 billion Won (Rs. 204 crore) to Bank of America. Additionally, interests from the three banks will add up to about 60 million won (Rs. 39 crore).

Also Read: South Korea's SsangYong Motor Looking For Possible Buyer As Mahindra May Exit

SsangYong's total outstanding loans aggregate up to 100 billion Won, which is approximately Rs. 680 crore. However, while Mahindra has stated that it has made a commitment to cover the above-mentioned loans given by the Banks, its final liability will be limited to the extent not recovered from SsangYong. We did reach out to Mahindra for an official statement on the matter, however, that company has stated that it will not share any further details apart from what's mentioned in the stock exchange filing.

Also Read: Mahindra Open To Exiting SsangYong, Looks At Bringing In A New Investor

Mahindra is looking for a buyer for all or most of its 75% stake in the loss-making South Korean venture SsangYong

Post the announcement, Mahindra and Mahindra's shares fell as much as 1.5 per cent on Tuesday to their lowest since November 23, 2020. On the other hand, shares of Ssangyong, which is listed in South Korea inter-alia fell up to 7.72 per cent.

Also Read: Mahindra To Sell Its Stake In SsangYong To US-Based HAAH Automotive

Earlier this year, Mahindra announced that it intends to sell all or at least 75 per cent of its stake in the South Korean Sport Utility Vehicle (SUV) maker, and is currently looking for a buyer. Back then, the company had stated that the move is part of a wider restructuring effort by Mahindra under which it is reviewing all of its loss-making businesses to cut costs and prioritise capital expenditure. Right now, Mahindra owns 74.65 per cent stake in SsangYong. Rumour has it that China's Geely and BYD might be interested in SsangYong. On the other hand, many recent reports suggest that US-based import car distributor HAAH Automotive Holdings is said to be interested in investing $258 million in South Korean SUV maker for a substantial stake in the company.