Mahindra: "If a new investor emerges, we will give up major shareholder status in Ssangyong Motor... No additional investment"

[Asia Economy Reporter Kiho Sung] Mahindra Group, the major shareholder of Ssangyong Motor, has stated that it will relinquish its major shareholder status if a new investor emerges. This essentially means that if no new investor appears, Ssangyong Motor is expected to face a liquidity crisis as no additional investment will be made.

According to industry sources on the 11th, Pawan Goenka, President of Mahindra, said during an earnings conference call held in Mumbai, India on the 7th (local time), "If we or Ssangyong find a new investor, Mahindra's shareholding could fall below 50%."

Currently, Mahindra Group holds a 74.6% stake in Ssangyong Motor. Goenka stated, "We are exploring various financing options for Ssangyong to reduce the shareholding below 50%. We are currently in talks with certain investors and will announce the status of new investors at an appropriate time."

However, to reduce the Ssangyong shareholding below 50%, shareholder approval is required according to company regulations, and it is known that Mahindra plans to obtain shareholder approval through postal voting.

If Mahindra Group lowers its stake in Ssangyong Motor, Ssangyong will have to repay capital borrowed from foreign banks. This is because there was a condition that Mahindra Group must hold at least 51% of the shares related to a loan of approximately 200 billion KRW.

On the other hand, Mahindra Group has expressed that it will no longer inject additional funds into Ssangyong Motor. Anish Shah, Vice Chairman of Mahindra, said, "Our position on Ssangyong has not changed," adding, "Regardless of whether investment is attracted, we will not inject more capital than now."

Currently, Ssangyong Motor is seeking new investors. It has appointed Samsung Securities and European investment bank Rothschild as sales agents and is working on the process, but there has been no significant progress so far.