이 기사는 2021년 03월 26일 08시06분 thebell에 표출된 기사입니다

SsangYong Motor is at risk of being delisted from the Seoul stock exchange after its auditor declined to give an opinion on the company’s financial results due to its negative shareholders’ equity position, raising expectations that the automaker will carry out a reduction of share capital soon.

SsangYong Motor shares entered a trading halt in December last year when the automaker filed for bankruptcy protection. A month later, the company revealed in its preliminary earnings release that its shareholders’ equity turned negative, leading to a warning of a potential delisting from the Korea Exchange (KRX).

SsangYong’s 2020 annual report released earlier this week showed that the accumulated losses more than doubled to 916.3 billion won ($808.4 million) for the year, further eroding the company’s common stock worth 749.2 billion won and reducing the total shareholders’ equity to negative 88 billion won.

Auditor Samjong KPMG has issued a disclaimer of opinion on SsangYong’s latest financial statements, citing concerns on its negative shareholders’ equity and ability to continue as a going concern. This has prompted the KRX to start a process of delisting the company from the market. SsangYong has been given until April 13 to file for an objection to the audit opinion.

A reduction of share capital can be an option for SsangYong to avoid delisting. A capital reduction allows the elimination of accumulated losses and in turn improves a company’s financial position temporarily.

Mahindra & Mahindra, the largest shareholder of the automaker, is in talks with U.S.-based HAAH Automotive Holdings over a sale of its controlling stake. It has long considered carrying out a capital reduction to sweeten the deal.

The Indian auto group earlier this month said it received approval for its capital reduction plan from the Reserve Bank of India (RBI), which normally forbids an Indian company from reducing capital by more than 25% when it sells its stake in a foreign company. The RBI’s approval has strengthened expectations that SsangYong’s capital reduction is imminent.

However, SsangYong is taking a cautious approach, saying its capital reduction plan has not been finalized yet. It has put a priority on sealing a deal with HAAH and buying more time to negotiate with creditors to avoid a court-supervised restructuring rehabilitation process.

The automaker recorded revenue of 2.95 trillion won on a consolidated basis, down 18.6% year-on-year. Its operating loss and net loss increased 59.4% and 47.7% respectively to 44.9 billion won and 50.4 billion won. The company’s car sales stood at 11,467 year-to-date as of the end of February, down 22.5% from the same period last year. (Reporting by Gyoung-tae Kim)