Seeking Assistance from Korea Development Bank
Pawan Goenka, managing director of Indian carmaker Mahindra & Mahindra Ltd., met with Lee Dong-geol, chairman of Korea Development Bank (KDB), on Jan. 16 in Seoul to ask for financial support for SsangYong Motor, its Korean affiliate.
Goenka, who is also the chairman of SsangYong Motor’s board of directors, reportedly disclosed a plan to invest 230 billion won, after approval by the board, during a meeting with employees at the carmaker’s Pyeongtaek plant, which was held before his talks with the KDB chairman.
The ailing Korean carmaker will hold a board meeting later this month. However, he refrained from elaborating on the investment plan, saying that it was difficult to say in detail how the investment would be made.
Meanwhile, KDB said its chairman Lee Dong-geol met with Goenka at the request of Mahindra. “Goenka said Mahindra would present a blueprint to normalize the operation of SsangYong Motor to demonstrate its commitment to the Korean automaker,” a KDB official said.
According to the official, Goenka stressed its efforts to revive the money-strapped carmaker, which has been unable to make a turnaround due to the recent slump in the global auto market. Goenka also said the Indian company is pushing for a strategic partnership with a leading global automaker to enhance SsangYong’s competitiveness.
SsangYong Motor has to repay 90 billion won (US$ 7.77 million) to KDB this year. Of the total, 70 billion won (US$6.04 million) will mature in July. Mahindra is believed to have requested an extension of the maturity of the loan. The company may want additional support from the state-run bank. KDB extended the maturity of 20 billion won (US$ 1.73 million) that came due in December.