[Asia Economy Reporter Kim Daehyun] Edison Motors filed an injunction to prevent the resale of Ssangyong Motor, which is undergoing corporate rehabilitation proceedings, but the court did not accept it.
According to the legal community on the 18th, the Seoul Central District Court Civil Division 50 (Chief Presiding Judge Song Kyung-geun) dismissed the injunction application filed by Edison EV and Edison Motors against the Ssangyong Motor administrator to prohibit the sale process and suspend the effect of contract termination the day before.
The sale of Ssangyong Motor began in December 2020 when the major shareholder, the Indian Mahindra & Mahindra Group, withdrew its investment, leading Ssangyong Motor to apply for corporate rehabilitation. In April of the following year, the court initiated the rehabilitation process for Ssangyong Motor and promoted a 'merger and acquisition (M&A) before approval of the rehabilitation plan.' EY Han Young Accounting Corporation was selected as the sales lead manager, and the bidding process began.
After competition among three companies, the domestic electric bus specialist Edison Motors was selected as the preferred negotiator for acquiring Ssangyong Motor. However, Edison Motors repeatedly clashed with the Ssangyong Motor creditors and labor union, and in March, the contract was terminated as they failed to pay the remaining acquisition amount of 274.3 billion KRW.
In response, Edison Motors strongly protested and filed injunction applications with the Seoul Central District Court requesting ▲ suspension of the effect of M&A investment contract termination and ▲ prohibition of the sale process against the Ssangyong Motor administrator. They also filed a special appeal to the Supreme Court against the Seoul Bankruptcy Court's decision to exclude their rehabilitation plan.
Meanwhile, after the contract termination notice, Ssangyong Motor proceeded with resale using the 'stalking horse' method. The stalking horse method involves selecting a prospective buyer, signing a conditional investment contract, and conducting an open auction. If a new prospective buyer offers a higher price, the initial buyer can match the bid, leading to competitive bidding.
Subsequently, the KG Group consortium submitted a bid of 900 billion KRW, surpassing Ssangbangwool Group and EL B&T, and was selected as the final winner on the 13th. Ssangyong Motor plans to announce the sale next month and receive letters of intent (LOI). They intend to sign the main contract as early as early July and submit the rehabilitation plan to the court, so it is expected that the court's approval will be obtained by August at the latest.
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