Edison Motors-led consortium named as preferred bidder for SsangYong Motor

Edison Motors Chairman Kang Young-kwon

[Graphics by Song Ji-yoon]

A consortium led by South Korean electric bus maker Edison Motors Co. has become the preferred candidate to command SsangYong Motor Co. under bankruptcy court, which could put the ill-fortuned SUV carmaker back under domestic management after being shifted from Chinese to Indian capital over the last two decades.

SsangYong Motor and court-appointed sales advisor EY Hanyoung announced Wednesday that it picked Edison Motors-led consortium as the preferred bidder for the country¡¯s smallest automaker and will apply for court approval.

The consortium includes financial investors Korea Corporate Governance Improvement (KCGI), Keystone Capital, and Edison Motors affiliate Semisysco Co.

SsangYong Motor had initially planned to select a preferred bidder in late September but the decision was pushed back on court request to complement bid proposals.

The court demanded adequacy in bidding price, validity of fund-raising outline, capacity to develop the company, adequacy of management plan after acquisition, and job security.

SsangYong Motor and its sales advisor plan to sign a memorandum of understanding with the preferred bidder by the end of this month after court approval. Final negotiations will be carried out after two-week-long due diligence.

According to industry sources, the bidder would have to come up with around 1 trillion won ($850 million) to cover overdues worth 700 billion won. State bank and creditor Korea Development Bank had said it could review extending loan if asked by Edison Motors.

Kang Young-kwon, chairman of Edison Motors, told Maeil Business Newspaper assured there would be no staff streamlining and vowed to turn around the company within a year or over the next three years depending on the cooperation from the management and employees.

Edison Motors is former vehicles unit of Hankuk Fiber. It changed its name to Green Motors after it was sold to Chinese company Taichi in July 2015. It was resold to Korean company EES in January 2017 and changed name to Edison Motors.

Edison Motors saw a rise in electric bus orders after successful commercialization of the country¡¯s first electric bus in 2010. It also developed the standard model of Korean-type compressed natural gas (CNG) low-floor bus in 2005. Last year, it was the largest supplier of electric bus in Seoul city.

Ssangyong Motor went under Daewoo later GM Korea in 1997 and then under Chinese maker SAIC in 2000. Upon bankruptcy, the company was sold again to Mahindra & Mahindra in 2011. The Indian carmaker put up its controlling stake to exit from the Korean market.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]