Korean Steel Company Chosen as SsangYong’s Last Bidder – Report
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SsangYong seems to have a new owner… again.
Yonhap reports that the Seoul bankruptcy court has approved a consortium led by chemical and steel conglomerate KG Group as SsangYong’s final bidder.
It brings the beleaguered company one step closer to having a new owner.
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The consortium, comprised of Seoul-based private equity firms Cactus Private Equity and Pavilion Private Equity, defeated a consortium led by underwear company Ssangbangwool.
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It will reportedly acquire SsangYong for 950 billion won (A$1.06 billion), including 600 billion won (A$671 million) of working capital.
That’s more than three times the 304.8 billion won that Korean electric bus manufacturer Edison Motors had pledged to pay for SsangYong before the deal was disrupted by non-payment.
SsangYong reportedly plans to sign a deal with the KG Group consortium in early July before submitting his rehabilitation plan to the court for approval in late August.
The Korea Economic Daily reports that the consortium will submit the rehabilitation plan to SsangYong’s creditors for approval at a meeting scheduled for late August.
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SsangYong has until October 15 to find a new owner and submit a new restructuring plan to the Seoul Bankruptcy Court.
In a statement, the court approved the KG Group consortium based on its acquisition price, fundraising plans, and financial status.
The consortium had already been selected as the preliminary bidder in a stalking horse bid, where the bidder proposed its price above all other bidders.
This allowed SsangYong to ask the KG Group to pay a higher price if another company made a higher offer.
Torres Credit: CarExpert
The two companies have a connection. KG Steel, part of KG Group, previously supplied components to SsangYong.
The automaker has said its condition has improved since the merger and acquisition process began in June 2021.
Earlier this month, it officially unveiled the Torres, a new SUV that fits between the Korando and Rexton.
The Torres will initially be offered a petrol engine and later an electric powertrain, making it SsangYong’s second electric car after the Korando e-Motion.
Korando e-Motion Credit: CarExpert
SsangYong is also opening a factory in Saudi Arabia that assembles vehicles from fully decomposed (CKD) kits.
It claims 30,000 additional vehicles will be exported annually after construction of the plant, which is set to begin in 2023, while also saying it has 13,000 backorders worldwide.
SsangYong remains under tutelage after he walked out of an acquisition deal with Edison Motors over non-payment of the electric bus manufacturer.
That prompted Edison Motors to ask the court to uphold the deal, but the court ruled that the deal was dead.
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Things were already looking shaky for Edison’s deal, with SsangYong’s creditors rejecting it in objection to the proposed debt restructuring and payment arrangement and the union opposing it over concerns over Edison’s viability.
The union reportedly raised concerns that Edison Motors lacked sufficient electrification technology for use in passenger cars and SUVs, despite Edison’s claims it could use its technology to shift production of gasoline and diesel-powered models to EVs within months.
SsangYong and Edison also reportedly disagreed on key acquisition issues, such as management rights and the scope of technology sharing.
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SsangYong has suffered yearly losses since 2017, with an operating loss of 260.6 billion won in 2021.
It went into receivership in April last year, when parent company Mahindra & Mahindra said it would no longer fund it and confirmed it wanted to sell its 74.65 percent stake.
That meant that SsangYong had to be placed under guardianship again, having gone through this process ten years earlier.
SsangYong’s family life has been restless for years, and never seems to have a stable parent for long.
Mahindra Alturas Credit: CarExpert
Daewoo bought a majority stake in the company in 1997, only to pay it off in 2000 because it was experiencing its own dangerous financial problems.
It has endured a few tumultuous years under Chinese ownership, with SAIC Motor acquiring 51 percent in 2004 but walking away in 2009 and putting it into receivership.
Mahindra & Mahindra was the next parent to adopt SsangYong, acquiring a 70 percent majority stake for 523 billion won in 2011.
It completed its range in the Indian market with a few rebadged SsangYong models but has largely kept the Mahindra and SsangYong brands separate.
Included credit: CarExpert