India-owned Korean automaker looking for new buyer

SEOUL, June 22 (UPI) -- SsangYong Motor, a South Korean automaker owned by India's Mahindra & Mahindra, is up for sale amid mounting deficits and the economic impact of the COVID-19 pandemic.Sources in the investment banking industry said Monday that Samsung Securities and Rothschild & Co. will take charge of tapping the market for potential buyers.

SsangYong acknowledged the company is looking for new investors.

"We have put forth various self-rescue efforts by selling off idle assets to secure liquidity," a SsangYong official told UPI News Korea. "Now, we are trying to find new investors, and toward that end, lead managers were designated."

The SsangYong official said that the debt-ridden sports utility vehicle manufacturer strives to issue new shares to attract fresh funds, which means that Mahindra's 74.65 percent stake would be diluted.

Meanwhile, though some may speculate that Mahindra is expected to let go of its majority stake in the company, Ssangyong declined to confirm so.

An executive at Mahindra reportedly said that the Indian firm was ready to give up its ownership stake in SsangYong.

SsangYong netted a $157 million loss during the first quarter of this year, which is more than seven-fold from a year ago. The carmaker suffered from operating losses for 13 straight quarters in a row.

Taking issue with SsangYong's ability to carry on, its auditor, Samjong KPMG, gave a disclaimer of opinion this year.

Mahindra originally planned to support SsangYong by offering about $200 million. But the Indian company canceled the investment plan in April, prompting observers to predict its divestment from SsangYong.