SsangYong Motors is looking for a new buyer after its acquisition deal with a consortium led by electric car manufacturer Edison Motors fell through, following the latter’s failure to fully pay the contract amount before the deadline.
SsangYong still faces rough roads ahead as its acquisition deal with Edison Motors falls through
Both automakers had formalized the deal in January 2022, stipulating a 305 billion won (around Php 13 billion) payment by the consortium to Mahindra & Mahindra of India, in exchange for its 74.65 percent stake in SsangYong. Edison Motors was able to make the required 10 percent initial payment, equivalent to 30.5 billion won (Php 1.3 billion) upon signing.
The Seoul Bankruptcy Court, which oversees SsangYong’s receivership, ordered that the remaining balance be paid by March 25, 2022, a deadline that Edison Motors failed to meet. Under the terms of the agreement, this effectively authorizes SsangYong to cancel the contract, which means that it is again on the hunt for a new buyer.
The Tivoli subcompact allowed SsangYong to turn in its first profit after nine years
A scheduled creditor’s meeting on April 1 that would discuss a rehabilitation plan for SsangYong will also no longer push through because of this development. Edison Motors reportedly asked the court for an extension of the deadline.
SsangYong had been in dire financial straits since 2000, with former owner Daewoo Motors selling the company off to SAIC of China. In 2010, Mahindra acquired a 75-percent stake in SsangYong for $463.6 billion (Php 23.9 billion today), resulting in the launch of the Tivoli subcompact crossover in 2015 and giving the Korean automaker its first profit in nine years.
Despite its financial woes, SsangYong is still developing new vehicles such as the J100 electric SUV
In 2020, Mahindra announced that it will no longer provide funding to SsangYong due to the latter’s outstanding debts. SsangYong filed for bankruptcy in 2020 and has been under court receivership since April 2021, although Mahindra technically still owns the company.
According to SsangYong, it sold 84,496 vehicles globally in 2021, a drop of 21 percent from the previous year.
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