Ssangyong Motor's 'Finding New Owner', Letter of Intent Submission Deadline D-DAY

HAAH and Edison Motors, Who Expressed Intent to Acquire, Likely to Submit Final Proposal

[Asia Economy Reporter Ki-min Lee] Ssangyong Motor, which is seeking a new owner, will close the submission of letters of intent for sale on the 30th.

According to industry sources, Ssangyong Motor and the lead sales agent EY Han Young Accounting Corporation plan to receive letters of intent by 3 p.m. on the day. Ssangyong Motor plans to conduct preliminary due diligence from August 2 to 27 for candidates who pass the screening among those who submit letters of intent by that day.

After the preliminary due diligence, they will receive acquisition proposals, select a preferred negotiator, and proceed with the main due diligence and investment contract steps. Inside Ssangyong Motor, there is a plan to select the preferred negotiator by the end of September and conduct price negotiations by the end of October. The deadline for submitting Ssangyong Motor's rehabilitation plan is September 1, but it is highly likely to be delayed until after the end of October depending on future sale schedules such as investment contracts.

So far, the domestic electric scooter company K-Pop Motors has submitted a letter of intent. K-Pop Motors reportedly prepared 380 billion KRW for acquisition funds when submitting the letter of intent the day before and plans to prepare an additional 1 trillion KRW if selected as the preferred negotiator.

Cardinal One Motors, established by Duke Hale, founder of the U.S. automobile distributor HAAH Automotive, and Edison Motors, a domestic electric bus manufacturer, are expected to submit letters of intent on the day for the acquisition of Ssangyong Motor.

Chairman Hale and Chairman Young-kwon Kang of Edison Motors recently expressed their firm intention to acquire Ssangyong Motor in media interviews. Chairman Kang stated, "We have secured 270 billion KRW in acquisition funds from individual investors, etc.," and added, "There are matters to coordinate, so we decided to submit the letter of intent on the 30th."

First, Cardinal One Motors plans to import and sell Ssangyong Motor's sport utility vehicles (SUVs) and pickup trucks in North America. Edison Motors plans to enhance Ssangyong Motor's competitiveness by applying its electric motor and battery management system (BMS) technologies in line with the electric vehicle era.

There is also a possibility that candidates who have not publicly disclosed their acquisition intentions will participate. An industry official said, "I know that not only Cardinal One Motors but also 4 to 5 other companies have made inquiries related to the acquisition of Ssangyong Motor."

However, for the acquisition and merger of Ssangyong Motor, which requires massive funds, the financial mobilization capability of acquisition candidates is essential for smooth completion. Including Ssangyong Motor's public interest bonds and future operating expenses, the actual required acquisition amount is estimated to be between 800 billion and 1 trillion KRW.

However, these companies' own sales fall far short of Ssangyong Motor's sales. In the case of HAAH Automotive, annual sales were only about 23 billion KRW as of 2019. Last year, Edison Motors' sales were 89.7 billion KRW, less than one-thirtieth of Ssangyong Motor's sales (2.9297 trillion KRW).

Meanwhile, Ssangyong Motor recently started the sale of its Pyeongtaek plant as a self-help measure to secure liquidity and is conducting unpaid leave for employees for up to two years.