- Proceeding ‘M&A before approval’ following discussion delays with the existing potential investor and participation of new candidates

- Expected to proceed fairly and transparently in accordance with the court's Rehabilitation rules, with faster negotiations with investors

- Company to resume production shortly and provide after-sales service smoothly to relieve customer anxiety

SsangYong Motor Company has announced that it is progressing with the ‘Merger & Acquisition (M&A) before approval on rehabilitation plan’ (M&A before approval) as the Seoul Bankruptcy Court orders commencement of rehabilitation procedures today.

Earlier, the court accepted the ‘Autonomous Restructuring Support’ program that SsangYong Motor applied for at the commencement of the rehabilitation procedure on December 21 last year, and this was agreed by the court thus preventing the commencement of rehabilitation procedures until February 28.

The suspension period having expired, and the LOI (Letter of Intent from the candidate investor) submission requested by the correction order from the court having not been completed by the deadline of March 31, the court commanded the commencement of rehabilitation procedures today.

Nevertheless, with discussions with the potential investor delayed, SsangYong Motor has decided to progress ‘M&A before approval’ under the court’s approval as there are a couple of new candidates interested in investing in the company.

Although the ‘P-Plan’ has been shifted to an ‘M&A before approval’, the two plans are similar in that both aim to shorten the turnaround time on the premise of the commencement of the rehabilitation process.

In addition, the ‘M&A before approval’ is expected to lead to quicker negotiations with investors since the bidding process proceeds fairly and transparently following M&A rules after the rehabilitation process has commenced.

Further, it is expected that an M&A can be concluded on more favorable terms by averting delayed negotiations with a single candidate who has secured an exclusive position in negotiations, and introducing competition among multiple candidates through open bidding. It is very positive that, in addition to the current candidate, additional applicants are unofficially showing their intention to participate.

SsangYong Motor therefore plans to promote the early termination of the rehabilitation procedures through an open competitive bidding process, such as selecting an M&A lead manager in the shortest possible time after consultation with the Seoul Bankruptcy Court.

Meanwhile, SsangYong has recently reassessed its assets, including its Pyeongtaek headquarters and 165 other lots of land as part of its efforts to improve the financial structure and avert the pressure on capital.

SsangYong Motor has also raised an objection to the Korea Exchange (KRX) over the decision to delist it from the local stock market on April 13, based on the anticipated improvement in its financial position over the coming year.

SsangYong Motor is currently making every effort to transform its situation by selling non-core assets and undergoing a level of business reengineering.

Yong-won Chung, receiver of SsangYong Motor appointed by the Court, said, “As normal production operation is the key to protecting creditors’ rights and reviving the company, we will resume production as soon as possible in consultation with our suppliers and provide after-sales services smoothly to relieve customer anxiety after the commencement of the rehabilitation procedures.”  [End]