Edison Motors Forms Consortium with Keystone PE to Acquire Ssangyong Motor... "Letter of Intent Submitted"

[Asia Economy Reporter Hyunseok Yoo] Edison Motors, a specialist electric bus company, is teaming up with private equity fund (PEF) operator Keystone PE to acquire Ssangyong Motor.

Edison Motors announced on the 30th that it has signed a memorandum of understanding to form a consortium with Keystone PE for the acquisition of Ssangyong Motor. The participation of KCGI (Kang Sung-bu Fund), which is currently under negotiation, will be finalized once CEO Kang Sung-bu, who is currently staying in the U.S., returns to Korea.

In the acquisition of Ssangyong Motor, Edison Motors will be the main entity for acquisition and operation, while Keystone PE, Semisysco, and TG Investment will participate as financial investors. The acquisition and operating funds are expected to be around 800 billion KRW.

The consortium submitted a letter of intent to acquire Ssangyong Motor on the 30th. After conducting due diligence from the 2nd to the 27th of next month, they will submit a formal acquisition proposal. If selected as the preferred bidder, they will proceed with final due diligence and investment contracts.

Founded in 2015, Edison Motors manufactures and sells CNG buses, low-floor buses, and electric buses. Last year, it recorded the highest market share of electric buses in Seoul, expanding its electric vehicle business.

Edison Motors plans to establish 20 local joint venture companies (JVCs) worldwide to produce 300,000 to 500,000 hybrid and electric vehicles annually. The company aspires to become a future automotive company competing with global automakers such as Tesla, Toyota, Volkswagen, and GM.

Keystone PE’s participation is expected to alleviate market doubts about Edison Motors’ acquisition funds for Ssangyong Motor. Keystone PE is a major private equity fund operator that recently acquired Asia Economy. It has also invested in Daewoo Shipbuilding & Marine Engineering, STX Engine, and Hyundai Asset Management.

A company official stated, "The participation of Keystone PE, a major private equity fund operator, validates that Edison Motors is the optimal company to normalize Ssangyong Motor," adding, "We will dispel doubts about our financing capabilities and gain an advantage among preliminary bidders."

Meanwhile, on the 26th, Semisysco, an affiliate of Edison Motors, decided to issue convertible bonds (CB) worth 80 billion KRW to TG Investment for the purpose of acquiring securities of other companies. Semisysco plans to use these funds to acquire shares in Ssangyong Motor and Edison Motors.

A Semisysco official said, "Edison Motors has already raised 270 billion KRW, and if institutional investors such as KCGI, currently in negotiation besides Keystone PE, join, we can raise between 1 trillion and 1.5 trillion KRW," adding, "We will secure acquisition funds for Ssangyong Motor from excellent institutions in cooperation with Keystone PE."