SsangYong future under a cloud
Unlike popular motoring news outlets, Outback Travel Australia didn’t share in the media enthusiasm for the proposed merger and acquisition (M&A) offer made by Korean electric bus maker, Edison, for troubled SsangYong Motors – currently operating under Seoul Rehabilitation Court administration.
Indian automotive giant Mahindra had taken over the ailing SsangYong operation in 2011 and, after 10 years of ongoing losses, walked away from it in mid-2020.
Edison Motors never looked like arranging finance for its proposed takeover of SsangYong Motor and, when the acquisition price of A$300 million could not be paid before the March 25th, 2022 deadline, the proposed M&A deal collapsed.
Edison’s chances of encouraging other companies to share in its bid were hampered by the fact that investors, including private equity fund Keystone PE and SM Group, as well as SsangYong unions and commercial creditors, doubted Edison Motors’ financial power.
Edison was committed to converting SsangYong’s vehicle lineup to battery-electric power as soon as possible. However, the reality seen by the unions was different.
Ssangyong Motor’s labour union said: “We have confirmed the fact that Edison Motors’ business plan, which says it can mass-produce electric vehicles with a small investment in a matter of months, is just an illusion”.
After the collapse of the Edison Motors bid, a battle kicked off in mid-April between three rival bidders: two medium-sized enterprises and a private equity firm, according to the Korean Herald.
KG Group, Ssangbangwool and Pavilion PE have submitted a letters of intent to acquire SsangYong Motor.
A new auction is scheduled to begin in May and SsangYong Motor hopes to select a preferred bidder at the end of June.
Plans on hold
SsangYong was hopeful of a successful bail-out when it announced in June 2021 provisional details for a new J100 and X200 wagon range, as well as new utes.
In addition, a deal to assemble the Rexton in Saudi Arabia was sealed in early 2022. SsangYong agreed to supply 169,000 kits to Saudi National Automobiles Manufacturing Company (SNAM), over a seven-year period.
However, SsangYong’s future is under cloud until new ownership of the company is worked out. The alternative would seem to be an unpalatable liquidation.