SsangYong may be acquired by Korean steel company – report

After the Edison Motors takeover failed, SsangYong there may be a new savior willing to pay more.

Yonhap reported that a consortium led by steelmaking chemical company KG Group has been selected by the Seoul Bankruptcy Court as the preliminary contractor for the ailing automaker.

An auction will take place later this month, and the proposed bid is already higher than the previous one.

KG Group and Sssangbangwool Group are said to have proposed bid prices of 900 billion won and 800 billion won (AUD 1.01 billion and US$904 million, respectively).

As a preliminary contractor, KG Group will issue a so-called stalking horse tender.

This is where it proposes its price to SsangYong before the auction, while other bidders submit their bid at the auction. If a company submits a bid higher than KG Group, then SsangYong can ask KG Group if they are willing to pay this higher price.

“SsangYong will sign a stalking horse agreement with KG corporation early next week and then make a public announcement of the new auction to find a new owner,” a company spokesman said. Yonhap.

KG Group is one of four companies that have submitted letter of intent last month for the main director of SsangYong, the accounting firm EY Hanyoung.

The others are Pavilion PE, electric vehicle parts maker EL B&T and lingerie company Ssangbangwool. Both EL B&T and Pavilion PE submitted bids last year before Edison Motors was selected.

Pavilion PE and KG Group then cooperated, forming a corporation.

SsangYong and EY Hanyoung are said to have accepted the consortium as the beater not only in terms of the proposed bid but also in terms of fundraising plans and job guarantee period.

However, Ssangbangwool has stated to still participate in the auction.

SsangYong has until October 15 to find a new owner and file a new restructuring plan with the Seoul Bankruptcy Court.

It said it aims to sign an agreement as early as July and submit its plan to the court by the end of that month for approval by the end of August.

SsangYong said its conditions have been approved since the merger and acquisition process began in June 2021.

It says it is on track to launch the new J100 SUV in late June, with an electric SUV it calls the E100 – its second EV after Korando -e-Motion – is scheduled to launch in the second half of next year.

SsangYong is also opening a factory in Saudi Arabia to assemble vehicles from fully assembled sets (CKD).

It claims 30,000 additional vehicles will be exported annually following the construction of the plant, which begins operations in 2023, while it also says it has 13,000 orders globally.

Currently, SsangYong is still being accepted by the court after leaving the agreement to buy Edison Motors after the electric bus maker failed to pay.

That prompted Edison Motors to ask the court to uphold the agreement, but in fact the court ruled the agreement was dead.

It already looked wobbly to Edison’s deal, as SsangYong’s creditors rejected it because of opposition to the proposed restructuring and debt settlement and its labor union opposed it due to concerns. concerned about Edison’s viability.

According to the report, the union raised concerns that Edison Motors did not have enough electrification technology for use in passenger cars and SUVs, although Edison stated that it could leverage its technology to convert produce gasoline and diesel models to EVs within a few months.

SsangYong and Edison are said to have disagreed on key acquisition issues, such as management rights and the extent of technology sharing.

SsangYong has posted an annual loss since 2017, recording an operating loss of 260.6 billion won in 2021.

It was received by the court last April, when Mahindra & Mahindra said they would no longer finance it and confirmed that they wanted to sell their 74.65% stake in it.

That meant SsangYong had to take up court again in her life, having gone through the process a decade earlier.

SsangYong’s life at home has been difficult for many years, and it never seems to have long-term stable parents.

Daewoo bought a controlling stake in the company in 1997, only to reduce it in 2000 when the company was going through its own dangerous financial woes.

It has experienced a tumultuous few years under Chinese ownership, with SAIC Motor acquiring 51% in 2004 but leaving in 2009 and leaving it in receivership.

Mahindra was the next parent company to receive SsangYong, acquiring a 70% controlling stake for 523 billion won in 2011.

THAN: SsangYong attracts four bidders after acquisition deal collapses – report
THAN: SsangYong, the history of a brand with an uncertain future
THAN: Edison Motors asks the court to save the acquisition of SsangYong – report
THAN: SsangYong petitioner gets court approval to purchase – report