Mahindra subsidiary Ssangyong Motor Co misses loan repayment to JP Morgan

The South Korea listed SUV maker that has been battered by the pandemic, has outstanding loans aggregating 100 billion Korean Won (approximately Rs 680 crore)

Ssangyong Motor Co, the South Korean subsidiary of Mahindra and Mahindra has missed a repayment of Rs 480 crore (60 billion Korean Won) to JP Morgan Chase Bank, South Korea which was due and payable on 14 December, Mahindra said in a stock exchange notification on Tuesday.

The South Korea listed SUV maker that has been battered by the pandemic, has outstanding loans aggregating 100 billion KRW (approximately Rs 680 crore). Besides JP Morgan, it includes (approximately Rs 68 crore) 10 billion KRW from BNP Paribas and (Rs 204 crore) 30 billion KRW from Bank of America.  

“Whilst the company has made a commitment to cover the above-mentioned given by the Banks, its final liability will be limited to the extent not recovered from SYMC,” it said in the statement.

It further added that on payment of the dues by the company to the banks, the company will be subrogated to all the rights of the Banks against SYMC and it will “step into the shoes of the Banks as creditor, and will be entitled to all rights which the Banks had against SYMC, with respect to these loan.”

Mahindra has been looking for a partner for the beleaguered subsidiary.  The Mumbai headquartered firm has crafted a strategy to exit from the loss making subsidiaries and underperforming businesses as it aims to bolster the return on equity for its shareholders. SYMC, which was anyways struggling amid competition from rival Korean firms, plunged deeper into the red after Covid-19. Hit by the impairment at SYMC, Mahindra reported its first quarterly loss in March quarter of FY20, in almost two decades. At 9:47 Mahindra was trading at Rs 717.90,  up 0.96 per cent on the Bombay Stock Exchange.