Korea-based bus maker Edison Motors, which has emerged as the preferred bidder for the Mahindra & Mahindra-owned SsangYong Motor Co. (SYMC), has promised to make fresh investments of more than Rs 6,300 crore if it wins the bid.
The debt-laden SYMC said last week it had selected the Edison Motors-led consortium as the preferred bidder. “The deal is estimated to be worth about $260 million (Rs 1,950 crore), according to industry sources,” Nikkei Asia reported.
The offer made by the preferred bidder is nearly the same as M&M’s purchase price inked in late 2010. The Mumbai-based SUV specialist had paid Rs 2,100 crore ($462 million at the then exchange rates) for a 70 percent stake in SYMC. The SYMC buyout was the biggest outbound deal by M&M.
SYMC is under court receivership and needs court approval for the sale. SsangYong and the consortium are expected to enter into a final agreement by the end of November, the Nikkei report added.
“To achieve the aim, we are planning to resume full operations with three shifts (in SsangYong plants) to produce existing combustion-engine, battery-powered, and hybrid models in the coming years,” Edison Motors Chairman Kang Young-kwon said in an online press conference, as reported by The Korea Bizwire.
SsangYong has been a troubled unit for M&M despite several attempts by the Anand Mahindra-led company to turn it around. The cash-strapped Korean company posted losses for more than 15 consecutive quarters and has been struggling to stay afloat. The Korean car brand even sold non-core assets to generate liquidity in 2020.
During FY20, M&M wrote off investments of around Rs 2,000 crore it made in SsangYong after putting its entire stake in the Korean company for sale in February that year. Also, in April 2020, M&M announced that it will not make any further investments in SYMC and declined SYMC’s request for fund infusion following the business disruption caused by the COVID-19 pandemic.
Mahindra and SYMC jointly developed the X100 platform which saw the birth of Mahindra XUV300 compact SUV in India and the SsangYong Tivoli in Korea. Mahindra also experimented with launching SsangYong SUV under its namesake brand. The Alturas premium SUV from Mahindra was a rebranded SsangYong G4 Rexton.
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