Mahindra’s Ssangyong Motor announced that a board of directors’ meeting on Thursday had approved a paid-in capital increase of KRW 80 billion (€55 million) to raise investment funds.
SsangYong will issue 14,545,455 new shares through third-party allotment, increasing the company’s paid-in capital by 11.9 percent. The board resolution will result in a capital increase from the current KRW 613.4 billion to 686.1 billion (€474 million). With the debt to equity ratio going down and liquidity increasing, the company’s financial strength is expected to improve significantly.
The willingness expressed by Mahindra to participate in the increase in the paid-in capital confirms the Indian company’s committment to provide continuous support as well as its determination to achieve an early turnaround of Ssangyong Motor Company. Ssangyong will use the funds from this capital increase to invest in new product developments such as small CUV models.
“By expanding investment in Ssangyong and creating tangible synergy in various areas such as sales, product development and sourcing, we will continue to increase our global competitiveness,” said Dr. Pawan Goenka, Chairman of the Ssangyong Motor board and President of Mahindra’s Automotive and Farm Equipment Sectors.
“With the recent decision on paid-in capital increase, we will be able to secure the necessary investment funds and at the same time, strengthen the financial soundness of the company,” said Lee Yoo-il, CEO of Ssangyong Motor.