Ssangyong Motor Agrees to Sign Definitive Merger and Acquisition Contract with Edison Motors

Ssangyong Motor Applies to Court on 10th for Approval of Investment Contract Conclusion

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor has agreed to sign the final contract for a merger and acquisition (M&A) with Edison Motors.

According to Ssangyong Motor on the 10th, the company plans to apply for court approval of the investment contract with Edison Motors at the Seoul Bankruptcy Court on the same day. Since court approval is required, the final contract, which includes an investment of approximately 304.8 billion KRW, is expected to be signed on the following day, the 11th.

Previously, Edison Motors and Ssangyong Motor had disagreements over prior consultation on the use of funds, leading to the extension of the legal deadline for contract signing from December 27 last year to the 10th of this month.

Edison Motors had demanded that Ssangyong Motor consult in advance on the use of funds in exchange for providing an additional 50 billion KRW in operating funds, separate from the contract payment.

However, Ssangyong Motor stated that business plans and technology development are classified as corporate secrets, so they could not share details of fund usage until Edison Motors completes the acquisition and the rehabilitation process is finalized.

After discussions, both parties reportedly reached a provisional agreement on the use of operating funds. Edison Motors also agreed not to request core technical data classified as corporate confidential information.

Furthermore, Ssangyong Motor and Edison Motors agreed through a separate memorandum of understanding (MOU) to reflect improvements related to the interior and grille of electric and internal combustion engine vehicles in the vehicles to be sold this year.

First, Edison Motors must pay 10% of the acquisition price as a deposit upon signing the final contract. Since 15.5 billion KRW was already paid when the MOU was signed, an additional 15 billion KRW needs to be paid.

After signing the final contract, the remaining acquisition payment, submission and approval of the rehabilitation plan including the repayment plan for each creditor and the reduction ratio of Ssangyong Motor’s shares will follow.

Ssangyong Motor must submit the rehabilitation plan to the court by March 1 and obtain creditors’ consent. Approval from the court requires the agreement of at least two-thirds of the creditors at the stakeholders’ meeting.

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