UPDATE 2-Mahindra's profit slides on one-time Ssangyong hit

Adds details on Ssangyong bankruptcy, comments on performance

BENGALURU, Feb 5 (Reuters) - Mahindra and Mahindra Ltd MAHM.NS reported a slump in third-quarter profit on Friday, as the carmaker reported a one-time loss on its South Korean unit Ssangyong Motor 003620.KS which has filed for bankruptcy

Mahindra, as part of a wider review to retain only those businesses with the potential to make money, has been in talks to sell its stake in Ssangyong. nL4N2JB295

The South Korean automaker, however, filed for a pre-packaged rehabilitation bankruptcy plan in December "which may involve capital restructuring for existing and current shareholders", Mahindra said in a statement.

Mahindra estimates it will incur a one-time loss of 12.10 billion rupees ($166 million) related to Ssangyong and the unit will also cease to be its subsidiary.

Upon approval of the bankruptcy plan, "the court will commence rehabilitation proceedings and appoint a receiver to manage the affairs of the company", Mahindra said.

On a standalone basis, profit after tax was 309.3 million rupees for the quarter ended Dec. 31, compared with 3.07 billion rupees a year earlier, Mahindra said.

However, Mahindra's standalone results in combination with those of its manufacturing unit translate to a profit after tax of 5.31 billion rupees for the third quarter, a 40% jump from the same quarter a year earlier.

"Capital allocation actions were targeted at loss-making subsidiaries, these actions have made a significant contribution to the financial performance," it said.

Mahindra, which last month said would increase prices of its personal and commercial vehicles, continued to warn of challenges due to a shortage of semiconductors and rise in commodity prices.

As part of its review, Mahindra has also ended its joint venture with Ford Motor Co F.N and has cut more than half of the workforce at its North American unit. nL1N2JO1B9

($1 = 72.9225 Indian rupees)

(Reporting by Chandini Monnappa in Bengaluru and Aditi Shah in New Delhi; Editing by Krishna Chandra Eluri)

((Chandini.M@thomsonreuters.com; +918061822697;))