SsangYong Motor’s plant in Pyeongtaek, about 70 kilometers south of Seoul. (Yonhap)
SEOUL, March 27 (Korea Bizwire) — A local consortium’s planned acquisition of SsangYong Motor Co. may fall apart, as it failed to pay the remaining acquisition money for the SUV maker by the deadline, industry sources said Sunday.
In January, the consortium led by Edison Motors Co. signed a final deal with SsangYong to take over the SUV-focused carmaker for 304.8 billion won (US$248.7 million) following the Seoul Bankruptcy Court’s approval of the acquisition plan.
SsangYong came under the court-led debt rescheduling program in April last year, as its Indian parent Mahindra & Mahindra Ltd. failed to attract an investor due to the COVID-19 pandemic and its worsening financial status.
The Edison consortium paid 10 percent of the acquisition money, with a plan to pay the remaining 273.4 billion won by March 25 to SsangYong.
The deadline was set five days before SsangYong’s creditors and other related parties hold a meeting on April 1 to discuss the carmaker’s debt payment schedules based on the acquisition money, a person familiar with the matter told Yonhap News Agency over the phone.
Edison Motors has asked for the postponement of the creditors’ meeting, as it needs more time to attract financial investors.
The electric bus and truck maker could not be reached for comments.
“The fate of the deal depends on whether EY Hanyoung accounting firm, SsangYong’s lead manager for the deal, on Friday called on the court to delay the creditors’ meeting by several weeks,” the person said.
Whether EY Hanyoung asked the court to consider the postponement will be available Monday, he said.
SsangYong is expected to decide on whether to cancel the deal with the Edison consortium by the end of this month if EY Hanyoung didn’t ask for the delay.
This file photo provided by SsangYong Motor shows the New Rexton Sports SUV.
Edison has said it will set up a special purpose company to raise from 800 billion won to 1 trillion won starting this year to invest in a stake of SsangYong through various means, including a rights issue, loans and bond issuance, to achieve a turnaround within three to five years.
Edison said it aims to transform SsangYong into an EV-focused carmaker in the next decade in line with changes in the automobile market.
SsangYong will remain under court receivership until SsangYong’s creditors accept the carmaker’s initial debt settlement plans.
When all the demands are met, the court will be able to allow SsangYong to graduate from the court-led debt-rescheduling process.
China-based SAIC Motor Corp. acquired a 51 percent stake in SsangYong in 2004 but relinquished its control of the carmaker in 2009 in the wake of the global financial crisis.
In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.
For the whole of 2021, its vehicle sales fell 22 percent to 84,106 units from 107,324 a year earlier amid the pandemic and chip shortages.
SsangYong’s lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.
(Yonhap)
