Edison Motors pays 10% for SsangYong buyout upon court approval

[Photo by Lee Seung-hwan]

South Korea¡¯s Edison Motors-led consortium Monday has moved onto delivering 10 percent of 304.8 billion won ($254.9 million) for the controlling stake in SsangYong Motor Co. upon go-ahead from the Seoul bankruptcy court.

It took around 80 days to finalize the deal after the consortium was named the preferred bidder for the stake on Oct. 20 last year. The signing of a formal contract also was delayed from Dec. 27 due to differences over detailed contract terms.

They agreed to consult with the execution of initial working capital of 50 billion won and share some of the research and development information on strengthened partnership between engineers for product competitiveness.

Upon the signing, Edison Motors-led consortium delivered the rest of its initial payment for acquisition or 15 billion won. It paid 15.5 billion won on Nov. 2 last year when signing the MoU.

It must wire the rest 274.3 billion won five days before stakeholders meet for their approval of the M&A.

Edison Motors would be buying 60 million new shares in SsangYong at 5,000 won apiece. The shares held by current Indian parent Mahindra & Mahindra would be retired or reduced to make Edison the new owner of SsangYong Motor who has been under foreign ownership over the last 15 years.

Edison Motors and Edison EV will be sharing 34 to 49 percent of the 95 percent ownership with its consortium partner KCGI fund.

SsangYong Motor should turn in debt payment outline and turnaround scheme to the court by March 3 to graduate from court management upon agreement with creditors.

Edison Motors, with 2020 sales of 89.7 billion won versus SsangYong Motors¡¯ 2.93 trillion won, claims it would be fully capable of raising the funds necessary to restrengthen the bigger carmaker through foreign investment and securities offerings.

Edison EV shares jumped by daily ceiling of 30 percent to close Tuesday at 36,900 won for two consecutive days.

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