SsangYong Motor, which has a plant in Pyeongtaek, South Korea, has picked a consortium headed by electric vehicle maker Edison Motors as a preferred bidder. Photo courtesy of SsangYong Motor
SEOUL, Oct. 22 (UPI) -- South Korea's consortium, headed by electric vehicle maker Edison Motors, was picked as the preferred bidder to take over India-owned carmaker SsangYong Motor.
SsangYong Motor announced Wednesday that it will apply for court approval for the decision on the preferred candidate, which also includes financial investors such as KCGI and Keystone Capital.
Once the bankruptcy court gives the nod to the plan later this month, due diligence will take place for two weeks before the final negotiations. SsangYong Motor expects that the contract will be signed next month.
HAAH Automotive, a U.S. distributor of imported brand vehicles, also threw its hat into the ring by forming a consortium. However, Edison Motors won out in the bid.
Edison Motors and its partners held an online press conference Friday, estimating that the necessary funds to acquire SsangYong Motor would lie somewhere between $1.3 billion and $1.4 billion.
Edison Motors CEO Kang Young-kwon asked the state-run Korea Development Bank to lend about half of that amount.
"We plan to electrify all of the internal combustion engine-based models of SsangYong Motor. By 2030, SsangYong will become a profitable company and sales will amount to $8.5 billion," Kang said.
SsangYong Motor's turnover stood at around $2.5 billion in 2020.
India's Mahindra Group holds around 75 percent stake in SsangYong.
Mahindra initially planned to channel $200 million to support the cash-strapped SsangYong. But the Indian conglomerate canceled the investment plan early last year.
Afterward, SsangYong came up with various self-rescue measures, but it struggled to stay afloat due to the accumulating losses amidst the COVID-19 pandemic.
The company was put under court protection in April for the second time in a decade, and the court-appointed manager tried to find a new owner.
In 2009, SsangYong also went through the same procedure, laying off a third of its workforce ahead of Mahindra's acquisition in 2011.
"As Edison Motors is a medium-sized electric car maker, there are concerns over whether the company will be able to manage the debt-laden SsangYong Motor," Daelim University automotive Professor Kim Pil-soo told UPI News Korea.
"We need to wait and see how things evolve. It seems that there are still big uncertainties in the future of SsangYong Motor," he said.