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Global firms eye SsangYong stake as Mahindra plans to reduce ownership

Mahindra, which holds a 75 per cent stake in SsangYong, rescued the sport-utility vehicle maker from near-insolvency in 2010

twitter-logoBusinessToday.In | August 10, 2020 | Updated 12:18 IST
Global firms eye SsangYong stake as Mahindra plans to reduce ownership
Mahindra & Mahindra

As Mahindra & Mahindra plans to reduce its association with loss-making global businesses, various global firms are reportedly eyeing a minority stake in bankrupt SsangYong Motor. Among the major companies include Renault Samsung Motors and Ford Motor.

Mahindra, which owns a 75 per cent stake in SsangYong, rescued the sport-utility vehicle maker from near-insolvency in 2010. In April, the company said that it would not invest further in SsangYong. Mahindra & Mahindra had rejected the special proposal to infuse fresh equity in the South Korea  auto firm. Despite various attempts, the financial condition of the South Korean company could not be improved by Mahindra.

On Friday, Mahindra & Mahindra board, in its annual general meeting (AGM), had moved a special resolution to cut down shareholding to less than 50 per cent in SsangYong.

"SsangYong is in dialogue with investors and we would announce the status of these dialogues at an appropriate time," The Economic Times reported citing Pawan Goenka, managing director, Mahindra & Mahindra, as saying.

Mahindra would review all its loss-making businesses over the next 12 months as part of restructuring effort by the company to cut costs and prioritise capital expenditure amid coronavirus crisis, global news agency had last month reported citing Mahindra & Mahindra's deputy managing director, Anish Shah.

Meanwhile, Mahindra & Mahindra reported 94 per cent fall in its consolidated profit at Rs 54.64 crore for June quarter 2020 due to coronavirus pandemic. Shares of Mahindra & Mahindra were trading at Rs 634.50, up 33.90 points, or 5.64 per cent on NSE at the time of reporting.

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