Ssangyong Motor - Edison Motors to Sign Investment Agreement on the 10th

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[Asia Economy Reporter Seungjin Lee] Edison Motors and Ssangyong Motor will sign an M&A (mergers and acquisitions) investment contract on the 10th.

According to industry sources on the 9th, Edison Motors is scheduled to sign the main contract with Ssangyong Motor on the 10th afternoon, involving an investment of approximately 304.8 billion KRW.

Previously, Edison Motors and Ssangyong Motor had disagreements over prior consultation on the use of funds. As a result, the legal deadline for contract signing, which was initially set for the 27th of last month, was postponed to the 10th of this month. However, by narrowing differences regarding the sharing of operating fund usage and requests for technical data?which had been obstacles to the main contract?they were able to sign the contract without missing the deadline.

Edison Motors insisted that, separate from the contract payment, it would provide an additional 30 to 50 billion KRW in operating funds, on the condition that Ssangyong Motor consults in advance on the use of these funds. In response, Ssangyong Motor stated that business plans and technology development are classified as corporate secrets, so they cannot share details of fund usage.

After discussions, both parties tentatively agreed to use the operating funds. However, Ssangyong Motor maintains the position that it will notify the use of funds rather than seek prior approval, so detailed negotiations are reportedly still ongoing.

Edison Motors previously excluded the private equity fund operator Keystone PE from the consortium formed to acquire Ssangyong Motor. Therefore, it now needs to secure about 105 billion KRW of investment funds from Keystone PE again. It is reported that KCGI, a private equity fund actively investing, is likely to invest in Keystone PE’s share and additionally acquire equity.

If the main contract proceeds on this day, Edison Motors must submit Ssangyong Motor’s rehabilitation plan by March 1. Afterward, it must pay the full acquisition funds and obtain approval from at least two-thirds of the creditors at the stakeholders’ meeting to acquire Ssangyong Motor.

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