Mahindra-owned SsangYong Motor has reportedly put up a controlling stake for auction as the cash-strapped company looks to bring on board a new investor to take control of the company.
SsangYong is presently going through a court receivership process following parent company, Mahindra & Mahindra failing to bring in a buyer over the last year after announcing it would make no more investment in the South Korean carmaker.
EY Hanyoung, the accounting firm in charge of the sale, stated that as it receives letters of intent (LOI) till July-end from potential buyers, it will begin initial reviews of the bids from August, and a preferred bidder is likely to be chosen in September, sources told the Economic Times.
SsangYong, which is 75% owned by Mahindra, has been under court receivership in South Korea since April after it failed to secure a rollover of $148 million worth of loans from creditors, comprising the state-owned Korea Development Bank (KDB) and several other banks.
"Auctioning the hard assets is the only option now for the company," Bahram Vakil, founding partner at AZB & Partners, told the publication, adding that the potential buyer will get the assets at a good price.
Also Read: No buyer for Mahindra-backed SsangYong Motor
Meanwhile, several reports mention that local law firm Shin & Kim is also taking part in the sale process in consortium with EY Hanyoung.
Initiating the share sale procedure, SsangYong has requested the Seoul Bankruptcy Court to defer the submission date for its rehabilitation plan to early September.
This is the second time the South Korean manufacturer has been put under court receivership.
In 2009, the company sacked over 35% of its employees, before Mahindra's acquisition in 2011.
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