Ssangyong Motor's New Ownership Candidate... 'Edison Motors Consortium' Selected (Comprehensive)

[Image source=Yonhap News]

[Asia Economy reporters Ki-min Lee and Dae-hyun Kim] Edison Motors Consortium has been selected as the new owner candidate of SsangYong Motor, which is undergoing corporate rehabilitation procedures. Accordingly, SsangYong Motor will enter a full-scale sale process again for the first time in 10 years since the merger and acquisition (M&A) with India's Mahindra in 2010.

The Seoul Bankruptcy Court plans to select Edison Motors as the preferred negotiation partner based on the report from SsangYong Motor’s administrator, Jeong Yong-won, on the afternoon of the 20th.

The court initially told reporters on the day, "Today is the day when the administrator of (SsangYong Motor) and others report the results of the ongoing review to the court. There is no decision or approval to be made by the court today regarding this," adding, "The future schedule will proceed according to the debtor’s (SsangYong Motor) review results and intentions."

However, after requesting two rounds of document supplements and completing the review, the court is known to have highly evaluated Edison Motors’ know-how in electric vehicle-related businesses, as well as the already secured investors such as the well-known domestic private equity fund Kang Sung-bu Fund (KCGI) and Keystone Private Equity (PE), along with their electric vehicle technology capabilities.

Accordingly, SsangYong Motor and the sale lead manager EY Han Young Accounting Corporation announced that they will select Edison Motors as the preferred negotiation partner and apply for court approval. SsangYong Motor stated, "Regarding the selection of the preferred negotiation partner, SsangYong Motor and the sale lead manager prioritized not only the initial acquisition fund size but also the willingness and ability to stably grow SsangYong Motor after the acquisition."

Regarding EL B&T, which proposed an acquisition fund of 500 billion KRW, a court official said, "According to the evaluation results reported by SsangYong Motor’s administrator, the EL B&T consortium was excluded from the evaluation due to insufficient proof of fund procurement."

This SsangYong Motor acquisition competition proceeded as a two-way battle between Edison Motors and EL B&T.

Initially, in the main bidding, the EL B&T consortium reportedly offered a bid in the low 500 billion KRW range, while the Edison Motors consortium offered a bid in the high 200 billion KRW range.

SsangYong Motor and EY Han Young plan to sign a memorandum of understanding (MOU) between the two parties by the end of this month after going through the court approval process for selecting the preferred negotiation partner. Additionally, a detailed due diligence will be conducted for about two weeks in early next month, followed by main contract negotiations regarding the acquisition price and key contract terms.

As the sale schedule has been delayed compared to the original plan, SsangYong Motor plans to submit an extension request to the court next week for the deadline of submitting the rehabilitation plan, which is set for the 1st of next month, in order to reflect the contents of the investment contract.

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