Ssangyong appears to be living on borrowed time as CEO flees the sinking ship
SsangYong Motor CEO Yea Byung-tae is resigning, a South Korean media report said.
“As securing new investment is taking longer than expected, and as the restructuring process is imminent, more complications and struggles are expected to lie ahead,” Yea said in a resignation letter cited by Korea JoongAng Daily which said it was sent to employees and executives at the automaker on Wednesday.
“Coming up with resolutions together with you could be an option, but as I deeply feel the shock and let down you would have felt, I think it is right to take responsibility as the president who took care of management so far,” the letter continued.
The report said Irvine, California-based auto distributor HAAH Automotive was a potential investor.
The Seoul Bankruptcy Court set a 31 March deadline for HAAH Automotive to send a letter of intent but the auto retailer hasn’t been responding, the paper said.
Without new investors, SsangYong Motor will end up in court receivership for the second time since 2009.
A replacement for Yea hasn’t been chosen, SsangYong Motor told Korea JoongAng Daily.
Ssangyong Motor reported an almost 24% fall in global sales to 7,122 vehicles in March from 9,345 units a year earlier, as the bankrupt company continued to struggle with supply disruptions due to cashflow issues. Global sales in the first quarter of the year were down by over 23% at 18,559 units from 24,139 previously.
Ssangyong filed for bankruptcy on 21 December 2020 after it failed to meet its debt obligations with creditors refusing to reschedule repayment deadlines. A number of local manufacturers have refused to supply components because of significant overdue payments, causing the automaker to suspend production for long periods throughout the last quarter. The Indian parent company Mahindra & Mahindra has said it was still negotiating the sale of all or most of its 70% stake in Ssangyong.