SEOUL -- SsangYong Motor filed for court receivership on Monday after it defaulted on loan repayment of about 60 billion won ($54.44 million).
"SsangYong Motor applied for the court receivership procedure as a massive disruption in the operation is expected after the company could not reach an agreement to extend its loan repayment deadlines with foreign banks," the South Korean automaker said in a statement on Monday.
Indian automaker Mahindra & Mahindra, which holds a 74.65 percent stake in SsangYong, said last week the total payment was due on Dec. 14.
About 30 billion won was owed to Bank of America, 20 billion won to JPMorgan Chase & Co. and 10 billion won to BNP Paribas.
SsangYong is burdened with high debt and its vehicle sales between January-November period fell more than 20 percent to 96,825 units, the automaker's filing showed.
The automaker said it had applied for an autonomous restructuring support program, which gives SsangYong up to three months to negotiate with stakeholders including creditors to resolve issues, delaying the court's decision.
Mahindra since June has been looking for a buyer for all or most of its 75 percent stake in SsangYong, which it bought from near-insolvency in 2010 but has struggled to turnaround.
"Regardless of SsangYong's filing for court receivership, negotiations of SsangYong sale deal is still ongoing," South Korea's trade ministry said in a statement.
In June, an executive at Mahindra said that the Indian company was willing to let go of its ownership stake in SsangYong.