Edison Motors-Ssangyong Motor Agree on Acquisition Price Reduction... Approximately 304.8 Billion KRW

Target to Sign Main Contract This Month
Deadline for Rehabilitation Plan Submission Extended to March Next Year

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] Edison Motors' acquisition price for Ssangyong Motor has been agreed upon at 304.8 billion won, reduced by 5.1 billion won.

According to the industry on the 19th, Ssangyong Motor applied for approval of the acquisition price adjustment to the Seoul Bankruptcy Court on the 17th. This is a procedure to obtain court approval for the acquisition price agreed upon by Edison Motors and Ssangyong Motor.

Previously, Edison Motors and EY Han Young Accounting Corporation, the lead manager for the sale of Ssangyong Motor, conducted negotiations over the final acquisition price.

Edison Motors, selected as the preferred bidder for the merger and acquisition (M&A) by proposing a total acquisition amount of about 310 billion won, demanded a reduction of up to about 15 billion won in the acquisition price, citing potential risks discovered during detailed due diligence.

However, as EY Han Young Accounting Corporation maintained its position that only about 5 billion won reduction was possible until the end, Edison Motors appears to have accepted this.

Edison Motors plans to pay 10% of the acquisition price within this month and sign the main contract. Even after the main contract is signed, the preparation of the rehabilitation plan is expected to extend beyond January next year.

Ssangyong Motor has postponed the deadline for submitting the rehabilitation plan from January 2 to March 1 next year. The deadline for the rehabilitation plan has been postponed four times since July 1 last year. The rehabilitation plan must receive approval from at least two-thirds of the creditors at the stakeholders' meeting to obtain the court's final approval.

Edison Motors' investment attraction for Ssangyong Motor's operating funds remains a variable.