HAAH Automotive, a US-based automobile distributor, is proposing to invest $258 million into the troubled Korean carmaker SsangYong Motor Co to acquire Mahindra & Mahindra’s (M&M) significant stake in the company, an investment banking source told Korean Investors, a news agency.
Last week, HAAH Automotive submitted a proposal to M&M that it is willing to invest in Ssangyong if it means its stake is large enough to control the Korean maker of sport utility vehicles, the agency added.
M&M, the largest shareholder of Ssangyong with a 75 percent stake, is understood to be considering the offer. When contacted, M&M declined to comment on the story.
In the proposal, HAAH Automotive also presented some conditions for its investment, such as a deferral of Ssangyong’s debt repayment to its creditors until the automaker is fully normalised, Korean Investors claimed quoting sources.
M&M has been looking for a partner for managing SsangYong since the beginning of 2020. In June, M&M said it was ready to cede control of SsangYong after it refused to pump in further investments into the cash strapped carmaker.
The Mumbai-based company had indicated at that time that it does not intend to exit SsangYong completely, but reduce its stake and become a minority investor.
In April, the M&M board declined to inject any more funds in to SsangYong after the Korean company sought an infusion of $406 million. Since then, SsangYong has liquidated some non-core assets to generate working capital while keep costs down.
HAAH Motors Holdings is a privately held company located in Irvine, California. China’s Chery Automobile Co, has partnered HAAH to assemble and sell SUV in the US under the brand Vantas.
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