Ssangyong Motor Co. Ltd. has received strong support from 103 Members of the Korean National Assembly for a revival plan now being reviewed by the Seoul Central District Court.
Court officials say a petition from the Assemblymen has been received that urges judges to approve the turnaround plan.
“If Ssangyong Motor goes bankrupt, it is expected to deal a serious blow not only to creditors, shareholders, employees and affiliated companies, but also to local economies and the nation's auto industry,” they say in the petition.
“Ssangyong Motor has enough capacity to move forward through this turnaround plan. We will take necessary measures to assist in the company’s revival.”
The court previously ruled the turnaround plan developed by Ssangyong required approval by two-thirds of existing creditors.
However, foreign bondholders voted not to approve the plan when creditors submitted their votes to the court last week. Only slightly more than 50% of creditors approved the plan.
Endorsements by the legislators, who represent both the ruling and opposition parties, are sure to sway the court to override its own rules and permit Ssangyong to put the plan into effect, analysts say.
The alternative would be the liquidation of the company's assets to pay off its creditors.