Automaker Mahindra & Mahindra’s South Korean unit Ssangyong Motor Co has defaulted on loan repayment of about 60 billion won ($55 million), the Indian company said in a statement to the stock exchange on Tuesday.
Of the total payment that was 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 Indian automaker fell as much as 1.5% on Tuesday to their lowest since Nov. 23, while those of Ssangyong fell up to 7.72%.
Mahindra has since June been looking for a buyer for all or most of its 75% stake in the South Korean sport-utility vehicle (SUV) maker, which it bought from near-insolvency in 2010 but has struggled to turnaround.
The move is part of a wider restructuring effort by Mahindra under which it is reviewing all of its loss-making businesses to cut costs and prioritise capital expenditure.
Ssangyong has total outstanding loans of about 100 billion won ($92 million) to the three banks, Mahindra said.
While the Indian automaker had made a commitment to cover the loans, its final liability would be limited to the extent not recovered from the South Korean SUV maker, it added.