HAAH Automotive Holdings had delayed making a decision on the acquisition of debt-ridden SsangYong Motor, raising speculation that the U.S. company may want to drop out of the deal after all.

HAAH, which for now is considered the only potential buyer for the South Korean automaker, asked for more time to deliberate, according to industry sources. It originally planned to make a takeover decision by Monday (February 22).

“HAAH completed an additional due diligence process last week and was set to decide whether to acquire the company as early as Monday,” an insider said. “But it apparently needed more time to conduct a fresh review of the deal as many things have changed in past months, including SsangYong’s bankruptcy filing in December.”

“A final decision by HAAH is expected by the end of this week,” the source added.

SsangYong applied in December for an autonomous restructuring support program, a court-designed process that allowed a period of about two months for the embattled automaker to find a solution on its own. The deadline is Sunday (February 28).

Hopes rose that negotiations between the two sides would make progress when the U.S. firm started an additional due diligence process earlier this month, having made its first offer for the automaker last summer.

A takeover by HAAH would make it easier for SsangYong to obtain consent from creditors for its plan to file for a prepackaged bankruptcy that will reduce the company’s debt burden. The filing of a reorganization plan – an important step to enter into a prepackaged bankruptcy – has been also delayed to early March as SsangYong waits for HAAH’s decision.

It is also possible that HAAH would want to take more time before making its decision, in which case SsangYong could ask the court to extend the deadline for the autonomous restructuring support program.

“Typically the program can be extended for one month at a time,” said another industry insider. “If SsangYong applies for an extension, the court will decide on the request after considering the likelihood of the company’s sale to HAAH.”

If the deal collapses, SsangYong would most likely fail to file for a prepackaged bankruptcy, industry watchers said. This will leave the company with no option but to go through rehabilitation proceedings, which typically end up with it being liquidated or sold through an auction by the court. (Reporting by Seon-young Kim)