New Delhi: Mahindra and Mahindra (M&M) board of directors has refused to inject 406 million dollars (about Rs 3,078 crore) as fresh equity in SsangYong Motor Company (SYMC) in light of the COVID 19 impact.

The board noted that large parts of the global economy are under shutdown. India particularly is under an unprecedented 21-day complete lockdown. Only emergency services are operating while everything else is & closed.

“After lengthy deliberation given the current and projected cash flows, the M&M board took a decision that M&M will not be able to inject any fresh equity into SYMC and has urged SYMC to find alternate sources of funding,” according to a statement issued by M&M.

However, with a view to enable SYMC to have continuity of business operations while it is exploring alternate sources of funding, the board has authorised the M&M management to consider a special one-time infusion of up to 32 million dollars (about Rs 242 crore) over the next three months.

Moreover, M&M will make every effort to continue support to all other non-fund initiatives that are & currently in place to help SYMC reduce capex, save costs and secure funds.

The examples of such support are: capex-free access to Mahindra’s new platforms such as W601, support technology programme which will help reduce SYMC’s capex, support the material cost reduction programme that is currently underway, and support SYMC management to find new investors.

“The board hoped that the employees and management at SYMC understand the magnitude of the unfortunate and unforeseen crisis created by the COVID-19 virus, which has compelled it to take the difficult decision,” said the statement.

SsangYong Motor Company is the fourth largest South Korea-based automobile manufacturer, which is owned by Indian multinational automotive company Mahindra & Mahindra.

The $20.7 billion Mahindra Group has presence in agribusiness, aerospace, commercial vehicles, components, defence, logistics, real estate, renewable energy, speedboats and steel among other businesses. It employs over 2.4 lakh people across 100 countries.