Where is Ssangyong Motor headed... Edison Motors Consortium losing Keystone Partner

Ssangyong Motor Photo by Yonhap News

[Asia Economy Reporter Changhwan Lee] Concerns are growing over the success of the acquisition bid as Keystone PE, a financial investor in the Edison Motors consortium formed to acquire Ssangyong Motor, has withdrawn.

According to the automotive industry on the 4th, the Edison Motors consortium recently canceled Keystone PE's plan to invest acquisition funds for Ssangyong Motor.

Edison Motors had previously formed a consortium with private equity fund KCGI and Keystone PE to pursue the acquisition of Ssangyong Motor.

However, Keystone PE postponed its investment decision after requesting a detailed business plan for Ssangyong Motor from Edison Motors, and the investment was canceled after Edison Motors rejected Keystone PE's demands.

The 17.4% stake in Ssangyong Motor that was to be held by Keystone PE is reportedly likely to be secured by KCGI.

Nevertheless, doubts remain in the market regarding Edison Motors' acquisition capability.

Edison Motors originally planned to borrow about 700 billion to 800 billion KRW, roughly half of the estimated 1.6 trillion KRW needed for the acquisition and business normalization of Ssangyong Motor, from the Korea Development Bank. However, the bank has expressed skepticism and a negative stance toward the rehabilitation plan.

The city of Pyeongtaek also stated that it is not at a stage to discuss negotiations regarding Edison Motors' plan to secure funds through real estate development of the Ssangyong Motor Pyeongtaek plant site after the acquisition.

Additionally, controversies have arisen regarding the acquisition of Edison EV (formerly Semisysco) conducted to raise funds for the Ssangyong Motor acquisition, as investment associations involved in the acquisition have been selling shares, causing further noise.

As a result, there are forecasts that the main contract between Edison Motors and Ssangyong Motor, scheduled for the 10th of this month, may be difficult to finalize.

Currently, negotiations on the investment contract (main contract) between Edison Motors and Ssangyong Motor are reportedly at an impasse over whether management involvement should be explicitly stated in the contract.

Edison Motors argues that since operating funds will be injected into Ssangyong Motor simultaneously with the signing of the investment contract, it should have the right to supervise the source and use of operating funds.

On the other hand, Ssangyong Motor reportedly holds the position that Edison Motors cannot intervene in management until the acquisition process is fully completed, as procedures such as court approval of the rehabilitation plan remain. Business plans and technology development are classified as corporate secrets and cannot be shared before the acquisition process is concluded.

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