Korean car company SsangYong Motor has filed for court receivership after missing loan repayments totalling 150 billion won (£100 million).
The company has applied for a restricting support programme which gives it three months to find a solution with its creditors.
The Korean Times reported shares fell almost 20 percent after the news was announced.
However, the firm’s UK operations are “totally unaffected and… very much open for business,” according to SsangYong Motor UK MD Kevin Griffin.
It continues to operate as normal and Mr Griffin said the restructuring “will result in the birth of a stronger company”.
SsangYong Motor is 75 percent owned by Indian conglomerate Mahindra & Mahindra, which rescued the firm in 2010.
Earlier this year, Mahindra confirmed it was looking to hand over its stake in SsangYong.
Filing for receivership will require SsangYong to undergo a restructuring programme in order to receive financial support.
Automotive News reported the company stated “massive disruption in the operation is expected”.
SsangYong vehicles are imported into the UK by SsangYong Motor UK, an independent company owned by Gibraltar-based Bassadone Automotive Group (BAG).
There are around 65 SsangYong retailers in the UK and earlier in December, BAG confirmed it had been looking to acquire part of the Colt Car Company, Mitsubishi’s UK operation, after the Japanese firm announced its withdrawal from Europe.
However, after discissions, Japan’s Mitsubishi Corporation withdrew from negotiations.
SsangYong Motor UK is now planning an open day for Mitsubishi retailers in January 2021.
The company plans to launch a new Rexton in March and a pure electric Korando in mid-2021.
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