Ssangyong faces uncertain future<\/p>\n
FOLLOWING hot on the heels of Kia's cash crisis comes news
\nthat Ssangyong -- South Korea's smallest carmaker -- may also be
\nfacing financial trouble.<\/p>\n
For the past year Ssangyong -- which launched its four wheel
\ndrive Boxer here in June -- has been suggesting that Daimler Benz
\nwas interested in increasing its share of the ailing South Korean
\nmanufacturer to maintain investor confidence.<\/p>\n
Daimler currently holds a 2.23 percent stake in Ssangyong and
\nprovides the company with its recently displaced 3.2-liter
\nstraight six and 2.3-liter four cylinder engines along with other
\ntechnical assistance.<\/p>\n
But despite claims by Ssangyong, the German car-maker
\ncontinues to deny it is talking to the company about increasing
\nits share.<\/p>\n
According to Reuters, Lee Chong-kyu, Ssangyong Motor
\npresident, told reporters last Thursday the company was in
\ndiscussions on a stake increase with Daimler-Benz.<\/p>\n
Attending a ceremony to launch Ssangyong's luxury \"Chairman\"
\npassenger car -- which is based on the old W124 Mercedes E-Class
\nLee said: \"It's really hard to talk about the deal, which is
\nstill on-going.\"<\/p>\n
His comments conflicted with a strong denial made on Wednesday
\nby a spokesman for the German company.<\/p>\n
\"No negotiations are going on about increasing our stake,\" a
\nDaimler-Benz spokesman said. \"Definitely not.\"<\/p>\n
Ssangyong Motor's debts have been estimated at more than 3
\ntrillion won ($US3.3 billion).<\/p>\n
Korea Stock Exchange officials on Thursday discussed whether
\nto ask Ssangyong to formally clarify the matter for investors,
\nbut decided no clarification was needed, an exchange manager
\nsaid.<\/p>\n
\"We decided to believe the information provided by our listed
\ncompany,\" the manager said.<\/p>\n
He said Ssangyong had informed the exchange in September it
\nwas in talks with Daimler-Benz about raising its stake and had
\nsaid it would notify the exchange if the talks resulted in a
\nchange.<\/p>\n
\"We decided to take no action for the time being, but we will
\nwatch the situation,\" the exchange manager said.<\/p>\n
Meanwhile, investors traded Ssangyong Motor stock at a
\nwhirlwind pace.<\/p>\n
More than 1.2 million Ssangyong Motor shares changed hands on
\nThursday.<\/p>\n
The stock closed off 120 won down to 5,460 ($US5.97), after
\nreaching a high of 5,780 and a low of 5,300.<\/p>\n
\"The pattern of trading of Ssangyong Motor can only be
\ndescribed as peculiar,\" said Henry Morris, managing director of
\nCoryo Securities.<\/p>\n
The market has often traded more than one million Ssangyong
\nMotor shares a day over the past six weeks, compared to South
\nKorea's largest carmaker, Hyundai Motor Co, whose daily trading
\nvolume has averaged about 51,000 shares, he said.<\/p>\n
Kang Hun Sok, auto analyst at ING Barings, said Ssangyong
\nMotor has been traded as a speculative stock for the past several
\nyears.<\/p>\n
\"From an investor's point of view, it's important to realize
\nthat not a lot of institutional investors have been interested in
\nthis stock,\" Kang said.<\/p>\n
He said he thought investors were putting too much emphasis on
\nthe possibility of Daimler-Benz increasing its stake in
\nSsangyong.<\/p>\n
\"What's in it for Daimler-Benz?\" Kang said.<\/p>\n
\"At this stage, I don't think they would want to take over an
\nailing company.\"<\/p>\n
James Son, auto analyst at SBC Warburg, said Ssangyong Motor
\ncould determine the future of the sixth-ranked Ssangyong Group.<\/p>\n
\"The destiny of Ssangyong Motor will have a great impact on
\nthat of the Ssangyong Group,\" Son said.<\/p>\n
\"If it can't attract capital from the outside, the whole
\nSsangyong Group might be in progressive trouble.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ssangyong-faces-uncertain-future-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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