Ssangyong Motors Seeking New Owner, China's Top Battery Maker CATL Shows Interest

[Asia Economy Reporter Kim Hyewon] CATL, China’s No. 1 electric vehicle battery company, has emerged as a strong final candidate among new investors sought by Ssangyong Motor. Interest is growing over whether Ssangyong, which is on the brink of court receivership due to severe management difficulties, will once again attract Chinese capital and achieve a dramatic turnaround.

According to investment banking (IB) industry sources on the 24th, CATL, China’s leading electric vehicle battery manufacturer, has reportedly expressed interest in investing in Ssangyong Motor. A source familiar with Ssangyong’s internal affairs said, “A Chinese electric vehicle battery manufacturer has been making covert contacts, and there are reportedly meaningful discussions progressing between the two parties.” This is the first time a battery company, rather than a complete car manufacturer, has pursued acquiring shares in Ssangyong.

Since the sudden withdrawal of investment plans by Ssangyong’s major shareholder, India’s Mahindra Group, in April, most of the parties that have expressed direct or indirect investment intentions in Ssangyong have been foreign companies from China, Vietnam, and the United States. Initially, Chinese Geely, BYD, and Vietnamese VinFast were considered, but recently it was revealed that HAAH Automotive Holdings, a U.S. car distributor partly owned by Chinese Chery Automobile, is preparing a binding acquisition proposal. However, the market harbors doubts about HAAH Automotive Holdings’ capacity to acquire Ssangyong’s shares, leading many to believe there may be other bidders.

If CATL, which is among the global leaders in the battery market, acquires Ssangyong with its formidable financial strength, it could instantly establish a foothold in the complete vehicle market. It is also evaluated that this would open up limitless opportunities for business expansion, including entry into the domestic electric vehicle market and overseas exports of complete vehicles and batteries based in Korea. Ssangyong aims to overcome its management crisis by launching its first electric vehicle, the compact sport utility vehicle (SUV) ‘E100,’ in the first half of next year.

Besides China’s CATL, Chinese companies have been consistently sending love calls to Ssangyong. If some or all of the 74.65% stake in Ssangyong held by Mahindra is transferred to Chinese capital, Ssangyong will welcome a Chinese company as its new owner for the first time in over a decade. Ssangyong was under the control of China’s Shanghai Automotive from 2004 until it was sold to Mahindra in 2010.

As the deadline for Ssangyong to find new investors approaches, the final rounds of strategic maneuvering among candidate companies are intensifying. If a new investor is not secured or liquidity is not obtained by the end of this month at the earliest or by next month at the latest, Ssangyong is highly likely to proceed with court receivership. However, the rapid resurgence of COVID-19 poses another variable, causing difficulties in due diligence and practical negotiations.

An official said, “Ssangyong has been holding video conferences with multiple companies interested in investing for several months,” adding, “Short-term loans borrowed from domestic and international financial institutions are maturing one after another, making it urgent to attract new investment, but the COVID-19 situation is causing obstacles to concrete progress in follow-up negotiations.”

The government and creditors are also closely monitoring the process of Ssangyong’s share sale. It is reported that if Ssangyong succeeds in attracting new investment, the government may consider providing some policy funds, such as the Industrial Innovation Fund, on the condition of strong self-help efforts to overcome the management crisis.

This content was produced with the assistance of AI translation services.