SsangYong to raise money for vehicle development

SsangYong Motor, the Korean unit of Indian carmaker Mahindra & Mahindra, said Wednesday it will raise 50 billion won ($47 million) through a rights issue for new vehicle development and facility investments.

SsangYong Motor plans to release 11,890,606 common stocks for 4,205 won per share and its parent Mahindra & Mahindra will purchase all the shares on Jan. 25.

The stocks will be listed on the main Korea Exchange on Feb. 12, the company said in a statement.

The local carmaker will use the proceeds from the sale to build updated models of its popular Korando C SUV. Funds will also be used to modernize its production facilities, it said.

In 2013, Mahindra & Mahindra invested 80 billion won worth of stocks in SsangYong Motor following its acquisition of the carmaker in 2011.

In a press event held last week, SsangYong Motor Chief Executive Choi Johng-sik said the carmaker aims to sell 163,000 vehicles this year, a 14 percent on-year jump, and make a turnaround this year. In 2018, the carmaker sold a total of 141,995 units.

SsangYong Motor reported net losses from 2000 through 2017 except for the year 2016.

In 2018, it is widely expected to post another annual net loss due to lackluster sales.

In the January-September period, net losses deepened to 57.85 billion won from 35.58 billion won in the year-ago period.

SsangYong Motor’s annual earnings results are due to be released in February.

Yonhap