Ssangyong Motor's Selection of Preferred Negotiation Partner Delayed to Next Month, 'Proof of Funds' Key Factor

Additional Review of Funding Plans for Acquisition Candidates

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] The selection of the preferred bidder for the acquisition of Ssangyong Motor is likely to be postponed until around mid-next month. This is due to the extension of the fund verification process for the candidates participating in the acquisition battle.

According to industry sources on the 28th, Ssangyong Motor and the sales lead manager EY Han Young Accounting Corporation plan to select one preferred bidder and one preliminary negotiation candidate around the 12th of next month after additional submission of documents related to fund verification and the subsequent verification procedures.

Originally, the plan was to select and notify the preferred bidder around the 29th of this month and sign a binding Memorandum of Understanding (MOU) in early next month. However, as the process of confirming the financial capability of the acquisition candidates is delayed more than expected, the overall schedule is also expected to be postponed.

Three parties have submitted acquisition proposals for Ssangyong Motor: the EL B&T consortium, the Edison Motors consortium, and IndiEV. Earlier, the Seoul Bankruptcy Court requested these candidates to supplement their Ssangyong Motor business normalization plans and resubmit related documents by the 30th of this month. Ssangyong Motor is reportedly still considering the supplementary materials as it views the current evidence for fund procurement as insufficient.

The issue of the financial mobilization capability of Ssangyong Motor acquisition candidates has been a consistent concern from the beginning. Among the candidates, Edison Motors, which has the highest sales, recorded sales of 89.7 billion KRW and an operating profit of 2.7 billion KRW last year, which falls far short compared to Ssangyong Motor’s sales of 2.9297 trillion KRW and operating loss of 446 billion KRW.