SsangYong Motor has filed for bankruptcy after it failed to make a loan repayment of about 60 billion won (RM219.8 million), Reuters reports. The ailing South Korean automaker said via a statement that the move is expected to cause a massive disruption in its operations.

The company said it had filed for court receivership after being unable to reach an agreement to extend its loan repayment deadlines with foreign banks. SsangYong owes Bank of America about 30 billion won (RM110 million), JP Morgan Chase 20 billion won (RM73.2 million) and BNP Paribas 10 billion won (RM36.6 million).

Mahindra & Mahindra, which holds a 74.65% stake in SsangYong, had said last week that the total repayment was due on December 14. The Indian automaker saved SsangYong from insolvency with a deal in 2010, but has had no success in turning things around. It had previously said it would be pumping US$423 million (RM1.7 billion) into SsangYong to make it profitable by 2022, but Covid-19 effectively ended that plan.

In April, Mahindra said it would no longer invest in SsangYong, and had asked the Korean brand to look elsewhere for funding. By June, the Indian company said it was willing to let go of its ownership stake and was looking for a buyer for SsangYong.

Sales have been dwindling for the Korean carmaker. It sold only 96,825 vehicles between January to November, 20% less than the corresponding period in 2019. In its filing, the company said it had applied for an autonomous restructuring support programme, which gives it up to three months to negotiate with stakeholders – including creditors – to resolve issues.

At the start of 2020, SsangYong had planned to begin selling a fully electric version of its Korando SUV in Europe. The electric model was due to be displayed at this year’s Geneva Motor Show, which became a casualty of the pandemic.