Mahindra controlled Korean car maker, SsangYong Motors which has failed to attract a potential investor is expected to go into court receivership as early as next week, said people familiar with the development. This even as SsangYong’s CEO, Byung Tae Yea has quit the company on the back of the company unable to find a potential investor.Sources told ET that the company’s Pyeongtaek plant in Korea has been shut down for a week with immediate effect, on the back of non-availability of critical parts including semiconductor units. With the ‘pre-packaged plan’ scenario practically eliminated, the SUV-focused automaker now faces the worst risk of market delisting and liquidation.SsangYong has over the last six to nine months failed to secure a letter of intent (LOI) from its likely potential investor, US-based HaaH Automotive before the March 31 deadline. Mahindra’s spokesperson conformed the development of Yea quitting in a section of the media and told ET early this week, “The court is managing the process. We understand that there may be interest from other investors”. “The creditors sent their opinion to the court yesterday. The rehab process will be started early next week or even today”, said Seung Bum, Partner at Seoul-based corporate law firm Yulchon. Court receivership is one step short of bankruptcy in South Korea’s legal system. In receivership, the court will decide whether and how to revive the company. “If the Rehabilitation process does not start, SsangYong can file an objection to stock exchange on external auditor’s decision by April 13”, added Bum.What is interesting is the possibility of a couple of new entrants in the fray who may look to stitch together a last minute deal to invest in SsangYong. Informed sources have confirmed to ET that Korea based EV makers Edison Motors, K-Pop Motors and Hyunlim Partners, an equity fund could be possible investors. However experts feel acquisition by a private equity fund is likely to be chaotic for SsangYong.SsangYong has been in talks with US vehicle importer HaaH to sell its majority stake as they filed for court receivership in December after failing to obtain approval for the rollover of 165 billion won worth of loans from creditors. SsangYong was given a three-month suspension of its obligation to pay the debts due to the talks with HaaH. The main creditor Korea Development Bank has yet not received any notice or documents from the court.“The abrupt decision by Mahindra to pull out of SsangYong in a pandemic year post confirming investments could be one reason why they have not been able to find a buyer till now”, said a person close to the development.KPMG Samjong Accounting Corp., the auditor of SsangYong, declined to give its opinion on the carmaker’s annual financial statements for the year of 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.Mahindra had earlier decided to shelve its plans to infuse $400 million equity in SsangYong post paying Rs 2,100 crore, or $463 million, for its purchase a decade ago.

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