M&M drops SsangYong equity plan
SYMC had requested for a fresh injection of equity from M&M to help it fund $406 million of expenses over the next 3 years
- Published 4.04.20, 4:17 AM
- Updated 4.04.20, 4:17 AM
- a min read
The spread of coronavirus has affected Mahindra & Mahindra’s (M&M) additional investment in its South Korean subsidiary SsangYong Motor Company (SYMC).
The M&M board on Friday decided that it will not be able to inject any fresh equity into SYMC and it has urged SYMC to find an alternative source of funding.
The management and labour union of SYMC had requested for a fresh injection of equity from M&M to help it fund 500 billion KRW ($406 million) of expenses over the next three years.
In a communication after market hours to the bourses, M&M said its board held a special meeting to review its investments in SYMC and also to discuss the approach to capital allocation in the light of the Covid-19 impact.
“After lengthy deliberations given the current and projected cash flows, the M&M board took a decision that the company will not be able to inject any fresh equity into SYMC and has urged SYMC to find alternative sources of funding,’’ the company said.
It added that with a view to help SYMC manage continuity of business operations while exploring alternative sources of funding, the board has authorised the M&M management to consider a special one-time infusion of up to $32 million over the next three months.