Mahindra & Mahindra Ltd. said April 3 that its board decided not to further invest in Ssangyong Motor Co. as the Indian automaker rolled out measures to tighten capital allocation during the coronavirus crisis.
The company's board urged its South Korean unit to explore "alternate sources of funding." Ssangyong Motor previously sought a new equity injection from parent Mahindra to help it fund 500 billion South Korean won, or US$406 million, of requirements over the next three years.
Mahindra is instead considering a one-time infusion of up to 40 billion won, or US$32 million, into Ssangyong Motor over the next three months to help it with business continuity as it looks for financing.
Mahindra will also continue to support all other non-fund initiatives to help Ssangyong Motor reduce capital spending and secure funds, including providing it with free access to its platforms, supporting its technology and cost-reduction programs, as well as helping it find new investors.
According to S&P Global Market Intelligence data, Mahindra holds a 74.65% stake in SsangYong Motor.
As of April 2, US$1 was equivalent to 1,228.85 South Korean won.