Edison "No Funding Issues Through You & I"
[Asia Economy Reporter Yoo Hyun-seok] The acquisition and merger (M&A) of Ssangyong Motor by the Edison Motors consortium is facing difficulties. Following opposition from the creditor group, the labor union has also voiced its resistance. On top of this, Edison EV is facing the risk of being designated as a management item.
According to the completed vehicle industry on the 26th, the Ssangyong Motor labor union submitted a statement opposing the Edison Motors consortium's M&A to the Seoul Bankruptcy Court on the 23rd.
The union stated in the opinion letter, "After practical consultations, we concluded that the operating fund procurement plan is unrealistic and lacks specificity," adding, "Edison Motors plans to raise investors by issuing paid-in capital increases and corporate bonds secured by Ssangyong Motor, rather than self-funding."
The union explained, "The consortium was supposed to be finalized by the 18th of this month to confirm the acquisition payment party, but the consortium has not even been finalized," and "Considering that even the consortium confirmation is facing setbacks, we can only conclude that the acquisition and operating fund procurement plans are nothing but fiction."
Earlier, the creditor group also submitted a petition and a letter of opposition to the acquisition signed by partner companies to the Seoul Bankruptcy Court. The content requested permission to find a new acquirer and restart the M&A process.
On the 25th of last month, Ssangyong Motor submitted the Edison Motors consortium’s rehabilitation plan to the Seoul Bankruptcy Court. The plan includes repaying only 1.75% of the approximately 547 billion KRW rehabilitation bonds in cash, converting the remaining 98.25% into equity. The creditor group stated, "While enduring the current difficulties, we will actively participate in development for Ssangyong Motor’s future until a true new owner is found," and requested, "We hope to be granted one more chance for court management within the limits allowed by law."
In response to this opposition, Edison Motors requested the court to postpone the stakeholders’ meeting originally scheduled for May 1st to mid-May. This appears to be to secure time for consultation with the creditor group.
Additionally, Edison EV, acquired by Edison Motors to raise funds for the Ssangyong Motor acquisition, is at risk of being designated as a management item. Edison EV was supposed to submit its audit report by the 22nd but announced that the submission is delayed due to incomplete audit procedures.
However, Edison Motors maintains that there is no problem with raising funds for the Ssangyong Motor acquisition. On the 11th of last month, Edison EV became the largest shareholder of U&AI. Subsequently, U&AI changed its name to EdisonInno and is pushing to join the consortium for acquiring Ssangyong Motor. A U&AI official said, "We aim to play a central role in the growth of the automotive parts business by sharing the group’s vision going forward," adding, "We will focus more on the automotive business sector and grow into a technology-intensive company overseeing new automotive technology sectors such as autonomous driving, motor technology, AI technology, and electric vehicle charging business."
An Edison Motors official said, "It is not yet a stage to worry about fund procurement," and added, "We can supplement fund procurement issues through U&AI."
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