South Korean carmaker Mahindra’s weapon involves payment of $ 55 million

Ssangyong Motor Co., the South Korean unit of automaker Mahindra & Mahindra, has advanced a loan repayment of about 60 billion won ($ 55 million) in advance, the company said in a stock exchange statement on Tuesday.

Of the total payment due on Dec. 14, about $ 30 billion in earnings were due to Bank of America, $ 20 billion in earnings to JP Morgan Chase and $ 10 billion in earnings to BNP Paribas, Mahindra said.

Shares of the carmaker fell by up to 1.5% on Tuesday to the lowest on November 23, while those in Ssangyong fell to 7.72%.

Since June, Mahindra has been looking for a buyer for all or most of its 75% stake in the South Korean sports utility vehicle (SUV) manufacturer, which it bought from near insolvency in 2010, but has struggled to turn.

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The move is part of a larger restructuring effort by Mahindra, in which it is reviewing all loss-making businesses to reduce costs and prioritize capital spending.

Ssangyong has total outstanding loans of about 100 billion won ($ 92 million) to the three banks, Mahindra said.

While the Indian carmaker has pledged to cover the loans, its final liability would be limited to the extent that it has not been recovered from the South Korean SUV manufacturer, he added.

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