Ssangyong Motor's Preferred Negotiation Partner to Be Decided Today... Possibility of Auction Failure if Acquisition Capability Not Proven

The Key Is Financial Proof and Business Normalization Plans That Can Persuade the Court

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] The new owner of Ssangyong Motor, which is undergoing corporate rehabilitation procedures, is expected to be revealed on the 20th. Since the court has requested supplementary documents twice from ELB&T and Edison Motors, if they fail to convince the court of their acquisition capability this time as well, the bid may be canceled.

According to related industries on the 20th, the Seoul Bankruptcy Court, after reviewing the supplementary documents submitted by ELB&T and the Edison Motors consortium, who participated in Ssangyong Motor's main bidding, is expected to announce in the afternoon whether to select the preferred negotiator and the backup negotiator.

Previously, after the main bidding deadline for Ssangyong Motor, the court requested the bidding companies to supplement the investment funds and management normalization evidence documents by the end of last month. However, the court found these insufficient and requested further supplementation by the 15th of this month.

As the selection of the preferred negotiator continues to be delayed, doubts about the acquisition capabilities of the two candidate companies are growing. The court is also keeping the possibility of a failed bid open and is analyzing the financial evidence such as balance statements, loan commitment letters, investment commitment letters (LOC), and detailed management normalization plans submitted by the two companies. Since Ssangyong Motor has repeatedly faced management difficulties after mergers and acquisitions (M&A), the court believes that if a company lacking financial and management capabilities acquires it, there is a high possibility of falling into insolvency again.

Within the industry, ELB&T, which proposed an acquisition price of 500 billion KRW, is considered to have an advantage over Edison Motors, which offered an amount in the high 200 billion KRW range. However, ELB&T's capital and sales last year were 3 billion KRW and 100 million KRW respectively, which raises concerns about its ability to acquire Ssangyong Motor, which had sales of 2.9502 trillion KRW and an operating loss of 449.4 billion KRW last year. Due to this, ELB&T is known to have supplemented and submitted specific financial evidence related to its investment details.

Moreover, ELB&T has yet to disclose any performance related to electric vehicle platforms or battery-related technology, making it uncertain whether it can normalize management after acquiring Ssangyong Motor. Regarding this, an ELB&T official stated, "We have developed our own dedicated electric vehicle platform technology and plan to disclose it in the future."

Edison Motors, which has partnered with private equity funds KCGI and Keystone Private Equity (PE), is reported to have recently raised its acquisition price to dispel concerns about its acquisition intent. If Edison Motors acquires Ssangyong Motor, it plans to improve financial soundness by addressing public claims of 700 billion KRW and request loans from the Korea Development Bank.

However, even for Edison Motors, which has sold electric buses, questions remain about whether it has the technological capability to immediately launch about ten types of electric vehicles next year. According to the Ministry of Land, Infrastructure and Transport, only Hyundai Motor and Zyle Daewoo Bus have the ability to develop electric buses independently and possess self-certification facilities. Other companies are classified as assemblers who purchase core components rather than manufacturers.

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