Ssangyong plans to cut SAIC's stake to 11.2%

Shanghai, September 15 (Gasgoo.com) South Korea's bankruptcy-protected carmaker Ssangyong Motor has submitted to a bankruptcy court its turnaround plan that suggests cutting the stake of its biggest shareholder SAIC Motor to 11.2% from the current 51%, Bloomberg reported today.

Ssangyong tries to emerge from bankruptcy without China's largest domestic automaker SAIC controlling the Pyeongtaek-based company. Shanghai-based SAIC paid $500 million for 49% of Ssangyong in 2004 and lost management control when the Korean carmaker went into receivership in February.

In a regulatory filing today after submitting its plan to the court, Ssangyong Motor also offered to repay 1.23 trillion won ($1 billion) of debt over a 10-year period while writing off some debt and converting some of it into new equity, as part of its effort to emerge from bankruptcy.

Under the proposal presented today, lenders would have a 42% stake after converting their debt into equity, and vendors would hold 28.1%, the Seoul Central District Court said. Other minority shareholders would own 17.7%.

Ssangyong entered bankruptcy earlier this year after SAIC and South Korea's government declined to bail out the company, which faced a cash shortage because of plunging sales.

The district court will review Ssangyong's proposal and plans to convene a meeting with interested parties on Nov. 6 to decide on the stake reduction and debt payout schedule.