Hopes are rising for a successful sale of debt-ridden SsangYong Motor after potential buyer HAAH Automotive Holdings began an additional due diligence process, giving a strong indication that talks between the two sides are continuing.

Samil PwC, which is working with the U.S. company, asked the automaker to provide its financial results for recent reporting periods for due diligence, sources said.

“HAAH seems to want to update information because many things have happened, including SsangYong’s bankruptcy filing, since last summer when it completed due diligence on the company,” an industry insider said.

SsangYong applied for the court’s autonomous restructuring support program in December and has been given until February 28 to find a solution with creditors. It intends to submit a reorganization plan with the bankruptcy court to file for a prepackaged bankruptcy that will reduce the company’s debt burden.

Filing for a prepackaged bankruptcy requires the nod of creditors holding more than half of SsangYong’s debt. But the automaker has been struggling to get consent from creditors. Korea Development Bank (KDB), the main creditor of SsangYong, made it clear in a press conference earlier this month that it would not provide further financial support until the automaker comes up with a concrete rehabilitation plan.

Concerns over the possible collapse of talks with HAAH have also complicated the situation. However, observers say the due diligence signals that a sale can still occur.

“Negotiations have been making slow progress but it is inaccurate to say talks have collapsed,” said a source. “HAAH will likely make a final decision after completing due diligence this week.”

A takeover of the automaker by HAAH would clear way some of the uncertainty about the company’s fate and help SsangYong get consent from creditors and permission from the court for its reorganization plan, industry watchers said.

HAAH has not yet revealed its acquisition financing plan. It has reportedly demanded that KDB provide additional funds to SsangYong so that the automaker can use the proceeds from the sale to invest in new businesses, rather than just staying afloat.

“Financial support by KDB is as much important for SsangYong as HAAH’s takeover decision,” said another industry insider. “KDB needs to ensure that HAAH has sufficient capital to fund its acquisition before making a decision on additional support.” (Reporting by Seon-young Kim)