US firm, 2 local firms submit LOIs for SsangYong Motor
A U.S. vehicle importer, a South Korea builder and a consortium led by a South Korean electric bus maker submitted letters of intent to acquire SsangYong Motor Co., they said Friday. Yonhap
A U.S. vehicle importer, a South Korea builder and a consortium led by a South Korean electric bus maker submitted letters of intent to acquire SsangYong Motor Co., they said Friday.
U.S.-based Cardinal One Motors, SM Group and Edison Motors Co. joined the race to acquire the financially troubled carmaker to expand their business portfolios.
U.S. businessman Duke Hale, chief of Cardinal One Motors, founded HAAH Automotive Holdings Inc. seven years ago to import vehicles from China for U.S. sales and tried to acquire SsangYong through the business entity.
But HAAH recently filed for bankruptcy due to rising U.S.-China tensions and the former HAAH chairman said he set up Cardinal One Motors to push ahead with the plan to acquire SsangYong.
"All the assets we bring to SsangYong, particularly our depth of auto experience, can help in the rehabilitation in Korea and expand sales through North America to (attain) SsangYong's highest achievement in its history," Hale told Yonhap News Agency via email.
The number of direct SsangYong jobs and indirect jobs should grow since our plan will more than double SsangYong's volume in three years, he said.
Edison Motors has formed a consortium with the Keystone private equity fund and two other financial investors to join an upcoming auction to take over SsangYong, the company said in a statement.
The company said another homegrown equity fund, the Korea Corporate Governance Improvement, may participate in the consortium.
SM Group said it has an interest in taking over SsangYong to diversify its business portfolio, which ranges from construction to shipping and auto parts manufacturing.
The companies are expected to conduct due diligence on SsangYong from Aug. 2-27 and submit their bids in the auction.
SsangYong's Indian parent, Mahindra Mahindra Ltd., had been in talks with HAAH to sell its majority stake in the Korean unit since last year as part of its global reorganization plan amid the COVID-19 pandemic.
HAAH was expected to submit its LOI to the Seoul Bankruptcy Court by March, but it did not send the documents, raising doubts about its intention to invest in SsangYong.
As for the failure to submit an LOI, Hale said the company needed more time to look into SsangYong's financial details before making an investment decision.
In April, SsangYong was placed under court receivership for the second time after undergoing the same process a decade earlier.
Court receivership is one step short of bankruptcy in South Korea's legal system. In receivership, the court will decide whether and how to revive the company.
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 2008-09 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 SUV-focused carmaker.
KPMG Samjong Accounting Corp., the auditor of SsangYong, declined to give its opinion on the carmaker's annual financial statements for the year 2020.
SsangYong could be delisted if its accounting firm again refuses to offer an opinion on the company's annual performance for the following year after the one-year period. (Yonhap)