Entering Search for New Owner 'Ssangyong Motor'... "Letter of Intent Submission by the 9th of This Month"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] Ssangyong Motor has announced its sale and has begun the search for a new owner in earnest.

Ssangyong Motor and the lead sales agent EY Han Young Accounting Corporation announced on the 2nd that they have issued a merger and acquisition (M&A) sale notice and will accept letters of intent to purchase until the 9th.

Ssangyong Motor explained, "The sale will proceed through methods of attracting external capital such as a third-party allotment rights offering and corporate bond issuance," adding, "It is a public competitive bidding method with a right of first refusal holder."

Having terminated the prior investment contract with Edison Motors, Ssangyong Motor is currently conducting a resale using the 'Stalking Horse' method, which involves signing a conditional investment contract with a prospective buyer and confirming the acquirer through a public bidding process. The KG Consortium was selected as the prospective buyer, beating the Ssangbangwool Group. The conditional investment contract was signed on the 18th of last month.

The KG Consortium consists of the special purpose companies (SPCs) KG Mobility, KG ETS, KG Steel, KG Inicis, KG Mobilians, and private equity funds Cactus PE and Pavilion PE.

If no letter of intent or bidder participates in this bidding, or if no bidder offers better terms than those of the KG Consortium, the KG Consortium will be selected as the final prospective buyer with the approval of the rehabilitation court. The Ssangbangwool Group has claimed that the KG Consortium colluded in bidding during the Stalking Horse prospective buyer selection process and has expressed its intention to participate in this bidding as well.

Prospective buyers who submit letters of intent and pass the screening will conduct preliminary due diligence on Ssangyong Motor from the 10th to the 21st of this month. Prospective buyers must submit their acquisition proposals by the 24th. The final prospective buyer is expected to be selected as early as the end of this month.

Ssangyong Motor will sign the final contract with the selected buyer in early next month. At the end of August, a creditors' meeting will be held to obtain consent for the rehabilitation plan.