SEOUL, Jan. 25 (Korea Bizwire) — SsangYong Motor Co., the South Korean unit of Indian carmaker Mahindra & Mahindra Ltd., said Tuesday it inked narrowed losses last year but remains in a complete capital erosion.
Net losses narrowed to 292.9 billion won (US$244 million) in 2021 from 504.34 billion won a year earlier on companywide drastic cost-cutting efforts, the company said in a statement.
Operating losses also decreased to 296.2 billion won last year from 449.4 billion won a year ago. Sales fell 27 percent to 2.42 trillion won from 2.95 trillion won during the cited period.
In self-help measures, SsangYong’s 4,700 employees began to take two-year unpaid leave in rotation on July 12 while accepting an extension of a cut in wages and suspended welfare benefits until June 2023.
The company also plans to sell its current Pyeongtaek plant, 70 kilometers south of Seoul, in three to five years and build a new factory to focus on electric vehicles in the same city.
On Jan. 10, a Seoul court approved the acquisition of SsangYong Motor by a local consortium led by electric carmaker Edison Motors Co.
On the same day, the Edison-led consortium signed a final deal to take over the financially troubled carmaker.
SsangYong was placed under court receivership in April last year for the second time after undergoing the same process a decade earlier. Its Indian parent Mahindra failed to attract an investor due to the COVID-19 pandemic and its worsening financial status.
Edison is required to submit its rehabilitation plans for SsangYong to the court by March 1.
For the whole of 2021, its vehicle sales fell 22 percent to 84,106 units from 107,324 a year earlier amid the pandemic and chip shortages.
SsangYong’s lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.
SsangYong reduced on-year net and operating losses last year but remained in complete capital erosion, raising chances of being delisted from the main bourse Korea Exchange (KRX).
KPMG Samjong Accounting Corp., the auditor of SsangYong, declined to give its opinion on the carmaker’s annual financial statements for the year 2020.
SsangYong could be delisted if its accounting firm again refuses to offer an opinion on the company’s annual performance for the following year after the one-year period.