Edison Motors Forms Consortium with Keystone PE and KCGI to Acquire Ssangyong Motor

Han Cheon-su, CFO of Semisysco, Ma Young-min, CEO of Keystone PE, Kang Young-kwon, Chairman of Edison Motors, Kang Sung-bu, CEO of KCGI, and Lee Byung-hyup, CEO of TG Investment (from left), are signing the agreement. / Photo by Edison Motors

[Asia Economy Reporter Hyunseok Yoo] Edison Motors, a specialist electric bus company, has newly recruited the activist private equity fund (PEF) management firm KCGI (Kang Sung-bu Fund) as a financial investor (FI) in the consortium acquiring Ssangyong Motor.

On the 9th, Edison Motors signed a consortium business agreement for the acquisition of Ssangyong Motor together with Keystone PE, KCGI, Semisysco, and TG Investment.

The main entities responsible for the acquisition and operation of Ssangyong Motor are Edison Motors and Semisysco & TG Investment. The financial investors (FIs) include Keystone PE and KCGI. Funding will be split with Keystone PE and KCGI covering half, and the remaining portion to be provided by strategic investors (SIs). They plan to raise over 800 billion KRW in acquisition and operational funds to revive Ssangyong Motor.

Chairman Kang Young-kwon of Edison Motors stated, "Keystone PE and KCGI agreed on the vision to create electric vehicles that have excellent design and quality while being competitively priced, aiming to become a car company that can compete and win against global automobile companies." He added, "This completely dispels market doubts regarding the procurement of acquisition funds."

KCGI CEO Kang Sung-bu explained, "Since our founding, we have continuously pursued ESG (Environmental, Social, Governance) investments. Until now, our focus has been mainly on Governance, but through this investment, we plan to expand into Environmental and Social areas as well."

Regarding concerns raised by some that "among the Ssangyong Motor acquisition candidates, some companies participated seeking real estate development profits," Chairman Kang Young-kwon responded, "We intend to grow Ssangyong Motor into a global future electric vehicle company to break the vicious cycle. If the Pyeongtaek plant site is redeveloped and relocated, any remaining profits after constructing the new plant and future vehicle facilities will be returned to the small business owners in Pyeongtaek who suffered losses and to employees who have not received wages." He continued, "Dividends received from the major shareholder’s stake will be returned to society and invested in new technologies."

After acquiring Ssangyong Motor, Edison Motors plans to produce electric passenger cars and electric SUVs, aiming to sell over 300,000 units annually. For Ssangyong Motor to return to profitability, the internal combustion engine vehicle volume must increase from 100,000 to 150,000 units, hybrid vehicles to 50,000 units, and electric vehicles from the initial 50,000 to 150,000 units.

Edison Motors has completed the development of a smart platform for electric vehicle production and electric vehicle design. Along with improving the financial structure, they plan to launch a project to make the company profitable within 3 to 5 years. They also plan to establish 20 joint venture companies (JVCs) worldwide, each targeting annual production and sales of 300,000 to 500,000 electric vehicles. To support this, they have completed the acquisition of Semisysco, which is strengthening its electric vehicle business. Additionally, they recruited Han Cheon-su, former Vice President of Finance at Kia Motors, as Vice Chairman of Edison Motors and Chief Financial Officer (CFO) of Semisysco.

Meanwhile, Edison Motors, established in 2015, manufactures and sells CNG buses, electric trucks, and electric buses. In 2020, it ranked first in electric bus market share in Seoul. The direct-seat electric bus (Smart 11H), which began sales this month, is equipped with LG Energy Solution’s battery pack (NCM Cell 348kWh) and has received official certification from the Ministry of Environment for a single-charge driving range of 475 km.