SAIC hefting Ssangyong bankruptcy impact

Shanghai, January 13 (Gasgoo.com) SAIC Motor Corp Ltd said it is now evaluating what the impact the bankruptcy protection filing by its South Korean unit will have on its financial status, according to newspaper reports.

SAIC, which holds a 51.33 pct stake in Ssangyong, confirmed that its Ssangyong Motor has applied for court receivership following careful discussions from the board. That would mean SAIC may lose all its stakes in Ssangyong and relinquish its management control, reported the Beijing News.

The Chinese automaker said in a statement that the value of its holding was 1.85 billion yuan at the end of November by Chinese accounting standards.

The Chosun Ilbo newspaper said the reason for Ssangyong Motor's filing for court receivership is that top shareholders, management and unionized workers of Ssangyong failed to do their jobs as they were busy passing the buck for the firm's malaise while business conditions worsened both domestically and overseas, including soaring oil prices and the onslaught of the worldwide economic crisis.

SAIC has already provided 25.9 billion won ($19.89 million) to Ssangyong and said further injection will only be available if the labor union of Ssangyong accepts the restructuring plan which includes cutting more than 2,000 jobs, but the union of Ssangyong refused the plan and is now busily preparing charges against SAIC for leakage of technology.