Questioning Ailing Automaker's Survival
SsangYong Motor's external auditor has issued a disclaimer of opinion on its quarterly financial statements, the ailing automaker said on May 17.
Samjung KPMG said in its audit report that it gave a disclaimer of opinion because it viewed SsangYong Motor's existence as questionable. However, SsangYong Motor's stocks are not suspended from trading right now as the disclaimer audit opinion is limited to the first quarter financial statements, not annual statements.
The disclaimer audit opinion stemmed from SsangYong Motor's rapidly deteriorating management situation. SsangYong Motor had posted a deficit for 13 consecutive quarters in the first quarter of 2020. The company’s operating loss amounted to 98.6 billion won and its net loss 193.5 billion won in the first quarter. Its current liabilities exceeded its current assets by 590 billion won. It cannot pay back debts that are due within 2020 without external assistance.
As for SsangYong Motor, the last resort is to receive support from the government and Korea Development Bank (KDB). Previously, SsangYong Motor announced that it would endeavor to receive support from the government and extend the maturity of debts from KDB. However, the government and KDB have yet to come up with specific support plans.