Mahindra-owned SsangYong Motor sold to South Korean consortium for $255 m
12 Jan 2022
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A consortium led by South Korean electric bus and truck maker Edison Motors Co has agreed to acquire debt-laden SsangYong Motor Co Ltd for 305 billion won ($254.65 million), in a development that would lead to SsangYong exiting receivership and Chapter 11 bankruptcy.
SsangYong, which is 75 per cent owned by Indian automaker Mahindra and Mahindra, has been under court receivership since April in an attempt to rehabilitate the carmaker after Mahindra failed to secure a buyer.
Mahindra, which owned about 75 per cent of SsangYong at the end of September, has been looking for a buyer for all or most of its stake, which it bought when the South Korean automaker was near-bankruptcy in 2010.
SsangYong is burdened with high debt and its vehicle sales last year fell to 84,496, down about 21 per cent from a year earlier, a regulatory filing from the automaker showed
The automaker reported a January-September 2021 operating loss of 238 billion won from revenue of 1.8 trillion won.
Mahindra completed the acquisition in February 2011 at a cost of $463.6 million.
In 2015, SsangYong launched the Tivoli, its first car after Mahindra acquisition. Within a year of Tivoli's launch, the company reported its first net profit in 9 years. In 2017, SsangYong sold 106,677 units in domestic sales and 37,008 units in exports, setting a record high in 14 years since 2003, when its annual domestic sales stood at 131,283 units. Out of this, the Tivoli alone contributed over 50,000 units of domestic sales for the company. Mahindra XUV300, which was later launched in 2019 is built on Tivoli's platform, sharing many parts including several metal sheets.
Mahindra also worked with its SsangYong subsidiary to introduce high performance electric vehicles in South Korea for mass-market sales.[37] Mahindra and SsangYong increased their collaboration on engines and electric cars.[38]
On 21 December 2020, SsangYong Motor filed for receivership and Chapter 11 bankruptcy after Mahindra cut funding to SsangYong due to its outstanding debt. Ssang Yong Motor spokesperson stated that the company owes a total of 315.3 billion won ($285 million) in overdue debt to financial institutions.
Edison Motors had plans to introduce SsangYong vehicles into the United States, Mexico, and Canada markets. It also intended to phase out production and new car sales of fossil fuel-powered SsangYong vehicles by 2030, moving into production and sale of only electric-powered vehicles.
