SEOUL, Dec. 23 (Yonhap) — SsangYong Motor Co., a cash-strapped South Korean carmaker, said Wednesday it will suspend production for two days due to disruption of parts supplies from its contractors.
The carmaker said it will halt operations at its factory in Pyeongtaek, south of Seoul, on Dec. 24 and Dec. 28, as five contractors, including Hyundai Mobis Co., S&T Dynamics Co. and LG Hausys Ltd, refused to supply auto parts.
Ssangyong Motor said it is negotiating with its contractors and will resume operations on Dec. 29.
Their move came two days after the South Korean unit of Indian carmaker Mahindra & Mahindra Ltd. filed for court receivership due to its 315.3 billion won (US$285 million) in overdue debt to financial institutions at home and abroad.’
SsangYong Motor has overdue debts of 100 billion won owed to foreign lenders like JP Morgan and 215 billion won to domestic lenders, such as Woori Bank and the state-run Korea Development Bank (KDB).
SsangYong asked its main creditor, the state-run Korea Development Bank (KDB), and other creditors to roll over the loans but failed to obtain approval from the lenders.
The company also received a three-month suspension of its obligation to pay its debts as it aims to find a new investor in the next three months before the court-led restructuring begins.