SEOUL, Jan. 1 (Yonhap) — Indian carmaker Mahindra & Mahindra Ltd. is in talks with an investor for the sale of its majority stake in SsangYong Motor Co. to reorganize its investments amid the pandemic, media reports said Friday.

Mahindra Managing Director Pawan Goenka said in an online briefing held Friday the Indian carmaker expects to sign a non-binding agreement next week to sell a controlling stake in the South Korean unit and conclude the deal by Feb. 28, according to foreign media reports.

Mahindra will hold a 30 percent stake or less in Ssangyong Motor if the deal goes smoothly and will also carry out a 25 percent capital reduction, Goenka said.

SsangYong could not be reached for comments on the reports.

In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.

On Dec. 21, Ssangyong filed for court receivership, as it struggles with snowballing debts amid the pandemic.

The SUV-focused carmaker asked main creditor KDB and other creditors to roll over the loans but failed to obtain approval from the lenders.

SsangYong 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.

Mahindra has said it does not have a plan to inject fresh capital into SsangYong and will give up its status as the biggest shareholder of the Korean unit if it finds a new investor.

HAAH Automotive Holdings, Inc., a California company that imports vehicles for the U.S. market, is reportedly a possible investor in SsangYong. HAAH declined to comment on the matter.

The SUV-focused carmaker logged net losses in the past 15 consecutive quarters through the third quarter of this year due to lack of new models and tougher competition with local rivals.

Its vehicle sales fell 19 percent on-year to 96,763 units in the January-November period from 119,876 a year earlier.

SsangYong’s lineup consists of the flagship G4 Rexton, as well as the Tivoli, Korando and Rexton Sports.

This is the second time for SsangYong to place itself under court receivership after undergoing the same process a decade ago.

China-based SAIC Motor Corp. acquired a 51 percent stake in SsangYong in 2004 but in 2009 relinquished its control of the carmaker in the wake of the economic downturn.

Court receivership is one step short of bankruptcy in South Korea’s legal system. In receivership, the court will decide whether and how to revive the company.

This file photo, taken April 5, 2020, shows SsangYong Motor’s plant in Pyeongtaek, 70 kilometers south of Seoul. (Yonhap)