South Korean unit Ssangyong Motor Co. of automaker Mahindra & Mahindra has defaulted on a loan repayment of about 60 billion won ($ 55 million), the company said in a statement to the stock exchange on Tuesday.
Of the total payment due on Dec. 14, about 30 billion won was owed to Bank of America, 20 billion won to JP Morgan Chase and 10 billion won to BNP Paribas, Mahindra said.
Shares of the automaker fell by 1.5% on Tuesday to its lowest since Nov. 23, while those of Ssangyong fell to 7.72%.
Mahindra since June is looking for a buyer for all or most of its 75 percent stake in the South Korean sports utility vehicle (SUV) manufacturer, which it bought from a near-defaulter in 2010 but struggled to turn around.
The move is part of Mahindra’s broader restructuring effort according to which it is reviewing all of its loss-making companies to reduce costs and prioritize capital expenditures.
Ssangyong has a total outstanding loan 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 will be limited to the extent not recovered by the South Korean sports van, it added.