South Korean auto firm SsangYong Motor Company is looking for a new majority investor by October in order to complete the sale process. This comes as the company struggles under court receivership. SsangYong's parent company Mahindra and Mahindra has decided to pull out of the carmaker.
The cash-strapped carmaker is expected to invite tenders by next month and is likely to submit a restructuring programme by the first week of July, as mentioned in a report in The Economic Times. Ernst & Young Hanyoung has been appointed by the court to oversee the sale process, stated the daily.
Mostly electric vehicle makers are likely to bid for SsangYong amid a push for EVs globally. US-based HAAH Automotive is one of the players to vie for the company, while a consortium of EV makers along with a private equity fund and electric bus maker Edison Motors are also in the game. HAAH had earlier offered $250 million, which is likely to be fixed as the value of the stake.
Finding a new buyer for the company under financial duress is not going to be an easy task due to the high levels of debt and fresh investments required for new product development.
The Seoul Bankruptcy Court put the company under court receivership after Mahindra & Mahindra failed to find a suitable buyer. The auto company had defaulted on a loan payment worth 165 billion won (US$148 million) on December 21, 2020 after which it applied for the receivership. The company was given three months to secure funds and it said it was in talks with HAAH. Mahindra & Mahindra holds a 75 per cent stake in the South Korean SUV manufacturer.
"We plan to promote the early termination of the rehabilitation process through the completion of the M&A, such as selecting an advisor in the shortest possible time in consultation with the Seoul Bankruptcy Court," SsangYong had said in a statement.
Also read: No buyer for Mahindra-backed SsangYong Motor
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