Mahindra of India "Targeting to Sell Ssangyong Motor Shares by the 28th of Next Month"

by Hwang Yoonju

Published 03 Jan.2021 13:49(KST)

Pawan Goenka Mahindra President

[Asia Economy Reporter Hwang Yoon-joo] Mahindra, the major shareholder of SsangYong Motor, announced that it will sign a share sale agreement by the 28th of next month. To this end, it is consulting with potential investors.

According to Indian media such as Business Today on the 3rd, Pawan Goenka, President of Mahindra, said at an online press conference on the 1st, "We are negotiating with potential investors regarding SsangYong Motor's shares. We hope to finalize the main term sheet next week."

He added, "The rehabilitation court has allowed ARS, and the (deferment) date is until February 28, so we have two months until the deal with investors is completed," and "The SsangYong Motor labor union supports ARS."

Goenka explained, "If the deal is completed, the situation will return to normal. A new investor will become the major shareholder, Mahindra will hold less than 30%, and will reduce its shares by 25% as permitted under the Reserve Bank of India regulations."

Mahindra acquired SsangYong Motor in 2011 and currently holds a 75% stake.

Goenka also stated, "If the deal fails, SsangYong Motor will undergo court receivership, and the management rights will be taken over by the court. Since a conclusion will be reached by March 1, we hope to complete the deal with investors within two months."

Anish Shah, Mahindra CFO (Chief Financial Officer), also said, "We want the investor to continue the management rights of SsangYong Motor. If it fails, we will proceed with a pre-packaged rehabilitation process, and there may be other options, but we will cease to be the major shareholder before the end of this fiscal year."