Mahindra & Mahindra (M&M) will increase the prices of its entire range of passenger and commercial vehicles from January 1, 2021. The share price of M&M has gained 4% in morning trade.- Meanwhile, its loss-making
South Korean subsidiary Ssangyong Motor has defaulted on loan repayment aggregating to $55 million (around ₹408 crore) to JPMorgan Chase. - In April this year, M&M’s board had rejected a proposal to inject any fresh equity into Ssangyong.
- M&M holds nearly 75% in the Korean subsidiary now, and has injected over $110 million in it since the acquisition.
The price hike will be effective from January 1, and across a range of its passenger and commercial vehicles models. The share price of M&M witnessed a 4% gain in morning trade.
This price hike announcement comes hours after its loss-making South Korean subsidiary Ssangyong Motor defaulted on loan repayment aggregating to $55 million (around ₹408 crore) to JPMorgan Chase Bank.
In a regulatory filing, M&M highlighted that the South-Korea listed subsidiary SYMC has outstanding loans aggregating to $92 million (approximately ₹680 crore).
These are three banks Ssangyong owes money to:
The South Korea-based automaker has been in the red for nearly three years and the pandemic only made it worse. It saw its losses deepen in the third quarter and reported the worst performance since the 2008 global financial crisis. In the July-September quarter it reported net loss of $89.1 million.
This default comes after Mahindra’s decision to no longer inject money into its subsidiary. In April this year, M&M’s board had rejected a proposal to inject any fresh equity into Ssangyong.
The pain point: Ssangyong acquisition
Mahindra acquired the loss-making Ssangyong in 2010. Despite several attempts, it has failed to turn its fortune around. M&M holds nearly 75% in the Korean subsidiary now, and has since injected over $110 million in it.
Mahindra has been looking for a potential buyer for SsangYong, after the loss making subsidiary took a toll on its profit this year.
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