SAIC to support Ssangyong without capital injection

Shanghai, December 4 (Gasgoo.com) China's Shanghai Automotive Industry Corp. (SAIC) said it will support its Korean unit Ssangyong Motor to combat the current liquidity crisis amid faltering sales but has ruled out direct capital injection into the automaker, local media reported.

The Shanghai-based Oriental Morning Post cited an unnamed SAIC official as saying that the Chinese auto giant will strengthen cooperation with Ssangyong in R&D, local sourcing and sales sectors but will not inject capital directly into its South Korean subsidiary.

"Ssangyong Motor is a listed company and its shareholders can not enlarge capitals on its own," the official said.

Ssangyong's labor union issued a newsletter to SAIC on Tuesday, asking SAIC to inject an "emergency fund" into the company to overcome the current liquidity crisis.

Ssangyong reported a net loss of 28.2 billion won for the third-quarter of this year, marking its fourth consecutive quarterly loss. Its November vehicle sales plunged 63 percent from a year earlier to 3,835 units.

SAIC acquired a 51 per cent stake in Ssangyong for US$500 million in 2004.