Seoul Bankruptcy Court approves SsangYong Motor's rehabilitation plan

KG Chemical CEO Kwak Jae-sun speaks after the Seoul Bankruptcy Court approves SsangYong Motor's rehabilitation plans Friday. [YONHAP]

The Seoul Bankruptcy Court approved a rehabilitation plan submitted by SsangYong Motor Friday, after creditors and shareholders accepted the plan.

The approval came one year and eight months after the company went into court receivership for a second time. A consortium led by KG Mobility was selected as the preliminary bidder in June.

"The approval came with 95.04 percent of agreement from our creditors, and 100 percent from secured creditors and shareholders," SsangYong Motor said. "Now it allows SsangYong to gain a foothold to pave the way for normalization."

KG consortium includes KG Eco Technology Services (ETS), KG Steel, KG Inicis, KG Mobilians, Cactus Private Equity and Pavilion Private Equity. KG Mobility is 100 percent owned by KG ETS, which is an energy company that is 47 percent owned by KG Chemical. KG Chemical traces its roots back to Gyeonggi Chemical, established in 1954 as Korea's first fertilizer manufacturer.

"I truly appreciate all who supported us for the plan to be approved," said Chung Yong-won, the court-appointed manager for SsangYong Motor. "We will exert all efforts to repay all to our creditors, stakeholders, and customers who believed us by making the company a sustainable one."

SsangYong said it plans to submit an application to end court receivership in October.

The automaker has seen a positive reception for its new Torres mid-size SUV, the company's first entirely new vehicle in four years. Introduced in July, around 60,000 Torres orders have been made so far, which is more than the company's total domestic sales in 2021. It sold 56,363 cars in the domestic market last year.

The Torres will be introduced on the global market in November, with an electric version to follow in the third quarter of next year. SsangYong also said it plans to release an electric pickup truck in the second half of 2024.

"It is with great pleasure that the court approves the rehabilitation plan and I sincerely appreciate all SsangYong employees who tried their best during the process," said Kwak Jae-sun, CEO of KG Chemical. "KG will fully support SsangYong for its business normalization and regain trust in the market."

BY SARAH CHEA [chea.sarah@joongang.co.kr]