SEOUL– Edison Motors Co. has filed a court injunction seeking to block SsangYong Motor Co.’s move to find a new buyer after its takeover bid fell through due to payment failure, a filing showed Tuesday.
Edison said in a regulatory filing that it lodged the injunction request with the Seoul Central District Court, claiming SsangYong must not “proceed with a new takeover other than the one with the Edison consortium under the contract signed in January.”
Edison has agreed to buy SsangYong, the South Korean unit of Indian carmaker Mahindra & Madrindra Ltd., for 304.8 billion won (US$247.4 million), but the deal collapsed after Edison failed to pay the remaining 274.3 billion won by the March 25 deadline.
The court has nullified the restructuring plan involving Edison and set a new deadline for SsangYong to find a new owner and submit a new restructuring plan by May 1. Edison has appealed the court decision.
SsangYong has applied for a court order to push for a resale.
Since the deal’s collapse, new potential buyers have expressed intent to take over the debt-ridden carmaker.
Ssangbangwool Group, a South Korean underwear company, said last week it submitted a letter of intent (LOI) to buy SsangYong, saying it has secured 450 billion won in funds for the takeover and will raise more money via rights issue and other means.
On Tuesday, KG Group, whose business ranges from steel to chemicals, said it has also submitted an LOI to EY Hanyoung accounting firm, SsangYong’s lead manager for the deal.
SsangYong has been under court receivership since April 15, 2021, after its Indian parent failed to attract an investor amid the COVID-19 pandemic and its worsening financial status.
Source: Yonhap News Agency