Seoul court freezes Ssangyong Motor`s bonds, debts

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SEOUL, Jan. 12 (Yonhap) -- A Seoul court decided on Monday to freeze bonds and
debts of Ssangyong Motor Co. prior to deciding whether to grant court
receivership for the cash-strapped automaker.
South Korea's smallest automaker applied for court receivership last week to
avoid bankruptcy. For months the company had been pleading with its parent,
China's Shanghai Automotive Industry Corp. (SAIC), for a cash injection to help
it cope with dwindling sales.
The Seoul Central District Court said it effectively froze the company's bonds
and debts to protect the company prior to its decision on whether to grant court
receivership.
SAIC will be forced to give up its management control at Ssangyong. Creditor
banks and a court-appointed manager will then decide whether to keep Ssangyong
afloat or liquidate it.
Creditor banks, led by state-run Korea Development Bank, expect Ssangyong will
not stay afloat for more than a month without financial assistance.
Some observers have called Ssangyong the first high-profile casualty of the
global economic crisis. Like the United States' Big Three, the automaker has
suffered from low demand due in part to a line-up that is dominated by
gas-guzzling sport-utility vehicles.
odissy@yna.co.kr
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