SsangYong recovery in jeopardy
Indian saviour pulls plug on cash lifeline to Korean brand, halting its return to profitMahindra has cancelled plans to turnaround SsangYong, choosing instead to save its cash to help it weather the coronavirus.
Mahindra says it was forced to tell the South Korean car-maker to seek investment elsewhere after posting an 88 per cent drop in its own March sales.
Addressing the markets, Mahindra issued a statement that read: "After lengthy deliberation given the current and projected cash flows, the M&M (Mahindra and Mahindra) Board took a decision that M&M will not be able to inject any fresh equity into SYMC and has urged SYMC to find alternate sources of funding."
Currently, M&M holds a 74.65 per cent stake in SsangYong.
Just two months ago Mahindra announced that it would invest $423 million ($A682m) as part of a rescue plan that would turn struggling Ssangyong around and become profitable by 2022.
As part of the plans, SsangYong announced that it would launch a pure-electric version of the Korando SUV in 2020.
Keeping the Korean car-maker afloat for the next three months, Mahindra says it was considering a one-off payment of $32.2 million ($A52m) while SsangYong seeks new investors.
Mahindra saved SsangYong from going bankrupt back in 2010. Since then, the Indian car-maker has struggled to revive it, despite re-focusing the business on China.
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