Court Approves Signing of Final Acquisition Agreement Between Ssangyong Motor and Edison Motors

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[Asia Economy reporters Seongpil Cho and Gimin Lee] Ssangyong Motor has agreed to sign the final contract for a merger and acquisition (M&A) with Edison Motors.

The Seoul Bankruptcy Court, Rehabilitation Division 1 (Presiding Judge Kyunghwan Seo) announced on the 10th that it has approved Ssangyong Motor to sign the final contract with the preferred M&A negotiator, the Edison Motors consortium.

On the morning of the same day, Ssangyong Motor, which submitted an application for approval to sign the investment contract with Edison Motors to the court, explained that it plans to proceed with the related procedures without a separate signing ceremony.

Previously, Edison Motors and Ssangyong Motor showed differences over whether to pre-consult on the use of funds, and the legal deadline for contract signing, initially set for December 27 last year, was extended to the 10th of this month.

Edison Motors had demanded that Ssangyong Motor pre-consult 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's side stated that business plans and technology development are classified as corporate secrets, so they cannot share fund details until Edison Motors completes the acquisition of Ssangyong Motor and the rehabilitation process is completed.

Nevertheless, it is known that both sides have tentatively agreed on the use of operating funds after discussions. Edison Motors is also reported to have agreed not to request core technical data classified as corporate confidential information.

Additionally, Ssangyong Motor and Edison Motors agreed through a separate memorandum of understanding (MOU) to reflect improvements related to the interior and grille of electric vehicles and internal combustion engine vehicles in the cars 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 signing the MOU, an additional 15 billion KRW needs to be paid.

After signing the final contract, the remaining acquisition payment, submission and approval procedures for the rehabilitation plan containing the repayment plan by creditors and the reduction ratio of Ssangyong Motor's shares remain.

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

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