The announcement, which will save hundreds of thousands of jobs, will allow the company to restructure as it faces debts of more than a billion dollars.

"We came to this decision as Ssangyong's value as a going concern exceeds that of liquidation and it is judged as being capable of carrying out the turnaround plan," a presiding judge said.

Ssangyong welcomed the Seoul decision and said it would double efforts to put its business back on track in the next three years by stepping up restructuring.

"Ssangyong will make all-out efforts to be reborn as a viable company," Lee Yoo-Il, a court-appointed manager, said in a statement, adding the company would soon present an "action plan" for its long-term survival.

About 200,000 jobs would be saved at Ssangyong's 430 contractors and parts makers. Official data showed 125 contractors connected to the firm went bankrupt or were forced to close their plants temporarily this year.

The company's stock price shot up 13.8 percent to 4,300 won (3.7 dollars) following the court announcement but the Korea Exchange suspended trading until Friday.

The court was brought into the row after domestic and overseas creditors failed to come to an agreement last month on the fate of the company, which has debts totalling 1.23 trillion won (1.05 billion dollars).

Petitions were submitted to the court by the company's suppliers while 103 lawmakers warned its liquidation would deal a serious blow "to local economy and the nation's auto industry."

The proposal put forward included its biggest shareholder, China's BAIC Motor, seeing its holding cut from 51 percent to 11.2 percent through a capital writedown. It also calls for Ssangyong to write down its debts at a ratio of three to one.

Ssangyong, the country's smallest automaker, had been granted court protection from creditors in February in exchange for massive layoffs and cost savings.

However, the firm was hit by a crippling strike that ended in August as workers protested at the mass redundancies.

The strikers had occupied the company's main plant for 77 days, sparking violent clashes with riot police that led to more than 100 injuries.

Ssangyong lurched into crisis due to slow auto sales, especially for its gas-guzzling sports utility vehicles, a problem that was made worse by the global slump. SAIC and Ssangyong's main South Korean creditor, the state-run Korea Development Bank, refused to bail it out.

The bank this week offered to extend 130 billion won in financial assistance to Ssangyong but analysts say the aid falls far short of what is needed to put Ssangyong back on track.

LIG Investment and Securities analyst Stephen Ahn told Dow Jones Newswires "it will take some time before Ssangyong finds a new owner due to various uncertainties" such as fierce competition at home and lack of fuel-efficient models.

The company plans to launch a crossover utility vehicle next year if it secures 200 billion won in funding.

Ssangyong became the nation's first major corporate victim of the global economic crisis as falling demand hit sales of new cars last year.

In the January-September period, Ssangyong's net loss widened to 532.56 billion won from 98.07 billion won a year earlier. It sold 29,927 vehicles from January to November, down 66 percent from a year ago.

Ssangyong said the court's approval would help quicken the process of finding its new owner. It promised to select a lead manager to handle the process in January.

Lee said the company would seek foreign or domestic investors to raise funds. "Some investors are interested in our company," he said.

Share This Article With Planet Earth

del.icio.us	Digg	Reddit
YahooMyWeb	Google	Facebook

Related Links
Car Technology at SpaceMart.com

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News