SsangYong secures creditor protection, for now

The Chinese-owned manufacturer had bankruptcy protection filing approved over the weekend allowing it another chance at life after it posted its fourth loss-making quarter in a row.

But analysts say despite the reprieve, the manufacturer is unlikely to turn itself around given a trend away from less fuel efficient SUV models, a staple of the SsangYong brand.

"Who's going to buy SsangYong? No one is sure whether to sell cars under SsangYong's badge even after changing owners," Sunny Sohn, autos analyst at KB Investment & Securities, said earlier.

In January, Russian car maker Sollers, previously Severstal-Auto, said it was seeking to buy the rights to produce SsangYong's SUVs.

Analysts have said SAIC could be prepared to let SsangYong go, given the industry's overcapacity and sliding sales, but it would work to try and normalise the company.

"A revival requires the company's own efforts, including strong restructuring, and the concession of creditors. If its own effort is not enough, the revival process will be abolished," the court said in a statement.

Any decision to close up SsangYong, which directly employs 7,100 people, could have far greater reaching implications with more than 200 suppliers that employ around 90,000 workers.

The court appointed Lee Yoo-il, former president of Hyundai Motor Co, the country's leading automaker, and Park Young-tae, SsangYong's director of finance planning, to manage the company.

Under court management, SAIC will relinquish control of SsangYong but maintain rights to some other SsangYong assets.

"SAIC cannot sell or transfer SsangYong's assets and make other major management decisions, although the top stakeholder can sell its stake outside the market," Hong said.

SAIC has estimated its 51 percent stake in SsangYong was worth around $271 million as of end-November. The Chinese firm paid $500 million for 49 percent of SsangYong in 2004, and pumped in another $45 million late last year.

SsangYong shares have been suspended since January 12, when it filed for bankruptcy protection.