SsangYong Motor Co., the South Korean unit of Indian carmaker Mahindra & Mahindra Ltd., said Friday its fourth-quarter net losses widened from a year earlier due to weak sales amid the coronavirus pandemic.
For the three months ended December, net losses deepened to 173.6 billion won (US$155 million) from 155.9 billion won in the year-ago period, the company said in a statement.
“Weaker sales and tougher competition with rivals weighed on the quarterly results as the COVID-19 pandemic prolongs,” it said.
Operating losses also widened to 114.5 billion won in the fourth quarter from 99.8 billion won a year ago. Sales fell 3.4 percent to 888.2 billion won from 919.2 billion won during the same period.
For all of 2020, net losses widened to 478.5 billion won from 341.4 billion won the previous year. Operating losses deepened to 423.5 billion won from 281.9 billion won, while sales declined 19 percent to 2.95 trillion won from 3.62 trillion won.
SsangYong logged net losses in the past 16 consecutive quarters through the fourth quarter. Its sales fell 19 percent to 107,324 vehicles last year from 132,799 units a year earlier.
SsangYong’s lineup consists of the flagship G4 Rexton, as well as the Tivoli, Korando and Rexton Sports.
The SUV-focused carmaker filed for court receivership on Dec. 21 after it failed to obtain approval for the rollover of the existing loans from its creditors.
The company received a two-month suspension of its obligation to pay its debts, as it aims to find a new investor during the period before the court-led restructuring begins on Feb. 28. The suspension period can be extended depending on the court’s decision.
SsangYong said Thursday its Indian parent Mahindra is “still in talks” to sell its controlling stake in the Korean unit, denying reports that the deal has fallen through.
Mahindra acquired a 70 percent stake in SsangYong for 523 billion won in 2011 and now holds a 74.65 percent stake in the carmaker.
If Mahindra fails to sign a deal with a potential investor in SsangYong, SsangYong said it is considering submitting its plan for rehabilitation procedures next month under a “pre-packaged” bankruptcy plan.
The Indian parent reportedly has been in talks with HAAH Automotive Holdings, Inc., a California company that imports vehicles for the U.S. market, to sell the Korean unit.
The pre-packaged plan is a combination of a workout and court protection, under which a restructuring plan is agreed upon in advance of a company declaring its insolvency. It is intended to shorten and streamline the bankruptcy process.
Separately, the country’s bourse operator, the Korea Exchange, said SsangYong Motor could be delisted unless the company submits documents that show its debt settlement by the end of March.
SsangYong Motor’s capital base has already been erased as of December, and the trading of its shares has been suspended since Dec. 21.