SEOUL– SsangYong Motor Co. said Tuesday its lead manager will receive bids from interested companies by late June in a new auction to find a new investor in the financially troubled carmaker.
EY Hanyoung, an accounting firm, will put a notice for the auction on June 2, receive letters of interest from interested parties by June 9 and receive bids by 3 p.m. on June 24, SsangYong Motor said.
The new auction will proceed in the form of a stalking horse bid.
In a stalking horse bid, a preliminary bidder suggests a price for SsangYong ahead of the auction, and other bidders submit their prices in the auction. If a company submits a price higher than the stalking horse’s price, SsangYong will ask the stalking horse if it can pay the highest bidding price to buy the carmaker.
Last month, SsangYong selected the consortium led by chemical-to-steel firm KG Group as a preliminary bidder for SsangYong, which has been under court receivership since April 15, 2021, after its Indian parent Mahindra & Mahindra Ltd. failed to attract an investor amid the COVID-19 pandemic.
The Seoul Bankruptcy Court extended the deadline for SsangYong to find a new owner and submit a new restructuring plan by six months until Oct. 15.
SsangYong aims to select a preferred bidder at the end of June, sign a deal in early July, submit its rehabilitation plan to the court in late July and obtain the court’s approval for its restructuring plan in late August.
The new auction comes two months after local electric bus maker Edison Motors Co. failed to make a full payment of 304.8 billion won (US$249 million) for SsangYong by the March 25 deadline.
SsangYong and EY Hanyoung accepted the KG consortium as it beat others in terms of the acquisition price, fundraising plans and employment guarantee period.
The latest deal’s collapse due to Edison’s failure to make payments marks yet another setback for the SUV-focused carmaker.
China-based SAIC Motor Corp. acquired a 51 percent stake in SsangYong in 2004 but relinquished its control of the carmaker in 2009 in the wake of the global financial crisis.
In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.
SsangYong’s lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.
To strengthen the lineup, SsangYong said it will begin production of the all-new Torres SUV, developed under the project name of J100, in June for its planned launch in July.
In April, four companies — KG Group, Pavilion PE, EV parts maker EL B&T and underwear company Ssangbangwool — submitted LOIs to EY Hanyoung. KG and Pavilion PE formed a consortium after submitting LOIs.
The KG consortium and Ssangbangwool Group reportedly suggested bidding prices of 900 billion won and 800 billion won, respectively, for SsangYong. The prices are far higher than Edison’s price.
Ssangbangwool said it will participate in the upcoming auction regardless of the preliminary bidder selection.
Source: Yonhap News Agency