Mahindra board cites crises triggered by the coronavirus pandemic as a justification for discarding its subsidiary investment plan. So, it will continue to support all other SsangYong Motors’ non-funding initiatives.
The board of directors of Mahindra & Mahindra (M&M) held a special meeting. So, to review investment in SsangYong Motor Company (SYMC). While reviewing the approach to capital management in light of the effects of COVID-19. Perhaps it recalled that Mahindra was considering spending 2.800 Rs of crore. As in the Korean carmaker in February. And expected profitability by 2022.
Mahindra’s board considered a plea from SsangYong’s management. And trade union for a fresh infusion of equity to help. And the business fund achieves the requirements of 500 billion Korean (Rs 3,004 crore) over the next three years. The board acknowledged that major parts of the global economy are under a shutdown. And India, in particular. So, it is under a full 21-day lockout that has never been seen before.
The board has introduced several steps to improve capital management discipline. To ensure that M&M stays solid through. And through the ongoing crisis. Given the existing and expected cash flows. After extensive deliberation, Mahindra’s board decided that the firm would not be able to inject any fresh equity into SsangYong. And so advised it to consider alternate financing sources.
Nonetheless, the board has allowed the M&M management to accept a special one-time injection of up to 40 billion Korean won (Rs 236 crore). So, over the next three months to allow the Korean carmaker to have continuity of business activities. While seeking alternative sources of financing.
Additionally, Mahindra says it will make every attempt to continue. And to support all other non-fund programs currently in progress to help the Korean carmaker cut CAPEX, save costs and raise funds.
- Capex-free entry to the new platforms including the W601 from Mahindra.
- Fund projects in the technologies that will help to raise the CAPEX of SsangYong.
- Help the already underway plan of content cost control.
- Help management to locate new investors in SsangYong.
Mahindra’s Board says it hopes that SsangYong’s workers. And management can realize the severity of the tragic and unexpected situation generated by the COVID-19 virus. This has prompted it to take the hard call.