SsangYong in trouble again, cancels acquisition – report

SsangYong can’t take a break.

The South Korean automaker acquired a buyer last year after being kicked to the curb by owner Mahindra, but that sale has now been dropped.

Korean newspaper Yonhap SsangYong has reportedly canceled a deal to sell its controlling stake to a consortium led by South Korean electric bus maker Edison Motors.

The conglomerate offered to buy back the assassinated carmaker for 304.8 billion won ($331 million) and paid 10%, but failed to meet the March 25 deadline for 90 % rest.

The deal has been skating increasingly thin, as creditors oppose the proposed restructuring and debt settlement plan.

Then the Korean store News Pulse SsangYong’s labor union reportedly filed an objection to the acquisition at the Seoul Bankruptcy Court last week.

It is said to have raised concerns that Edison Motors did not have enough electrified technology to use in passenger cars and SUVs, although Edison claimed that it could leverage its technology to transform production. exporting gasoline and diesel models to EVs within a few months.

The union has also questioned Edison’s ability to raise funds. Edison included medical device maker U&I in an acquisition joint venture, but Keystone Private Equity pulled out.

Edison is said to have yet to receive court approval to change the corporation structure.

SsangYong and Edison are said to have disagreed on key acquisition issues, such as management rights and the extent of technology sharing.

The Edison-led consortium was selected by the bankruptcy court last October as the preferred contractor for SsangYong, after owners Mahindra & Mahindra put it on the market.

In January 2022, the court approved the sale.

Sources say Investor that SsangYong could not afford to give Edison more time to pay the remaining acquisition costs.

Edison may also not receive the pre-booked payment back.

Effective cancellation of the agreement will return SsangYong to its normal state, as it will remain within the jurisdiction of the court and must require the court to find another buyer.

It is unclear if SsangYong can find a more favorable deal.

After several potential bidders dropped out, the court had three potential buyers to choose from: the Edison corporation, a Los Angeles-based Indi EV startup, and another consortium led by the Electric Company. Life Business and Technology of South Korea takes the lead.

None of these companies currently make electric vehicles, generally SUVs or race cars.

Edison said it plans to set up a special purpose company to raise between 800 billion won and 1 trillion won (AU$930 million to AU$1.16 trillion) in investment for SsangYong, for whether it is in the form of foreign investment, issuance of rights, issuance of bonds. , or loans.

It said it had “no problem raising the necessary capital” and was working towards this and setting aside the struggling carmaker for three to five years, refocusing as an electric vehicle manufacturer.

SsangYong has started production Korando E-Motionand has released sketches of two other electric SUVs in development: the KR10 and J100.

The company went to court last April, when Mahindra & Mahindra said it would no longer fund and confirmed it wanted to sell its 74.65% stake in it.

That meant SsangYong had to take up court again in her life, having gone through the process a decade earlier.

SsangYong’s life at home has been difficult for many years, and it never seems to have long-term stable parents.

Daewoo bought a controlling stake in the company in 1997, only to reduce it in 2000 when the company was going through its own dangerous financial woes.

It has experienced a tumultuous few years under Chinese ownership, with SAIC Motor acquiring 51% in 2004 but leaving in 2009 and leaving it in receivership.

Mahindra was the next parent company to receive SsangYong, acquiring a 70% controlling stake for 523 billion won in 2011.