Mahindra & Mahindra says deal to sell SsangYong Motor to Edison terminated

Mahindra & Mahindra on Thursday stated that a deal to sell its debt-ridden unit, SsangYong Motor Co Ltd, to South Korean electric carmaker Edison Motors Company had been terminated.

SsangYong has been under court receivership since last April in an attempt to rehabilitate the carmaker after majority owner Mahindra and Mahindra failed to secure a buyer.

Based on our enquiry, the Receiver of SYMC have today informed us that a consortium led by South Korean Electric Busmaker Edison Motors Co has agreed to acquire the debt-ridden SYMC for 304.858 billion won (equivalent to approximately $254.65 million or Rs 1,882 crore) through a primary equity investment in SYMC," M&M said in a regulatory filing, adding that the court has also approved SYMC and Edison Motors signing a merger and acquisition (M&A) investment contract.

SsangYong is burdened with high debt, and the company has said its 2020 vehicle sales fell more than 20 per cent from a year earlier to 107,416 vehicles. Its 2020 operating loss widened to 449 billion won ($401.76 million) from 282 billion won a year earlier. Revenue fell 19% to 3 trillion won.

Mahindra, which owned 75 per cent of SsangYong as of the end of last year, has been looking for a buyer for all or most of its stake, which it bought when the South Korean automaker was near-bankruptcy in 2010, but has struggled to turn it around.

In January 2022, the consortium led by electric car company Edison Motors agreed to acquire SsangYong Motor.

On Thursday, M&M shares closed 0.82 per cent higher at Rs 834.60 apiece on BSE.