Court freezes Ssangyong Motor's assets, debt

(ATTN: RECASTS headline, lead, para 3; ADDS more background at bottom)
SEOUL, Jan. 12 (Yonhap) -- A local court froze Ssangyong Motor Co.'s assets and
liabilities on Monday before deciding whether to grant the ailing automaker
protection from creditors.
The smallest carmaker in South Korea filed for court receivership last week to
avoid bankruptcy. It usually takes about a month for the court to make decision.
For months, Ssangyoung has been pleading with its parent, China's Shanghai
Automotive Industry Corp. (SAIC), for a cash injection, but in vain.
The Seoul Central District Court said it decided to shield Ssangyong's assets
from creditor claims as well as ban the company from selling any assets pending a
decision on receivership.
If a court receivership is granted, SAIC will be barred from exercising
managerial control over the troubled carmaker. Creditors and a court-appointed
manager will then take over and try to turn it around.
Ssangyong's move came on the brink of its bankruptcy amid worsening cash-flow
conditions stemming from plummeting sales at home and abroad.
Creditor banks, led by the state-run Korea Development Bank, expect Ssangyong
will not stay afloat for more than a month without financial assistance.
Some observers have called Ssangyong South Korea's first high-profile casualty of
the global economic crisis. Like the United States' Big Three, the automaker has
suffered from low demand in part due to a product lineup dominated by
gas-guzzling sport utility vehicles.
Earlier in the day, Ssangyong's unionized workers said they voted in favor of a
general strike against job cuts, but said they will not strike for the time
being, citing "a possible negative impact the overall economy."
But the union said it will file a compensation lawsuit against SAIC, accusing the
Chinese parent of stealing car-manufacturing technology and failing to honor its
investment pledge.
odissy@yna.co.kr
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