KG Consortium Virtually Confirmed
KG Group Holds Priority Purchase Rights
Chairman Kwak Jae-sun Shows Strong Acquisition Intent
Ssangbangwool's Acquisition Offer Expected at 400 Billion Won, Higher Than KG
KG Also Considering Raising Initial Offer
Actively Securing Funds Through Affiliate Sales
[Asia Economy Reporter Choi Dae-yeol] The acquisition battle for Ssangyong Motor has effectively tilted toward the KG Consortium, centered around major affiliates of the KG Group. Holding the right of first refusal and with KG Group Chairman Kwak Jae-seon’s strong intention to acquire, the industry had long anticipated KG Group’s takeover. With the upcoming new car expected to succeed in early sales, signaling a green light for business normalization, attention is focused on whether Ssangyong Motor will accelerate its management stabilization post-acquisition.
According to industry sources on the 28th, EY Han Young Accounting Corporation, the sale’s lead manager, and the Seoul Bankruptcy Court had not disclosed the contents of the acquisition proposal submitted last week by the Ssangbangwool Group (Gwanglim Consortium) to the KG Consortium as of that morning.
A KG Group official said, "We have not yet received any information from the lead manager or the court regarding the acquisition amount or conditions proposed by Ssangbangwool," adding, "A specific decision will be made after reviewing the proposal." A Ssangyong Motor representative also stated, "The final selection of the prospective acquirer is still under review," and "KG Group has not approached the lead manager or Ssangyong Motor regarding exercising the right of first refusal."
This sale is proceeding under a stalking horse method, where a conditional investment contract is signed with the prospective acquirer before a public bidding process, due to the tight deadline. KG Group, selected as the prospective acquirer last month, holds the right of first refusal. Ssangbangwool submitted its proposal on the 24th, the deadline day. Although the exact amount was not disclosed, industry sources say it is around 400 billion KRW, exceeding KG’s offer.
According to the original schedule, the lead manager and the court should inform KG of Ssangbangwool’s proposal within three days and ask whether KG will exercise its right of first refusal. The reason for not notifying KG by the morning of the final day remains unclear. However, the industry speculates that Ssangbangwool’s proof of acquisition funds may not have met the standards of the court or accounting firm, or that there were defects in the proposal, causing delays beyond the initial plan.
An insider familiar with the sale process said, "With little time left before Ssangyong Motor’s rehabilitation deadline, there is no reason to delay," adding, "It is possible they are scrutinizing the acquisition amount and proposal more thoroughly." Another source said, "Given past issues where Ssangyong Motor’s acquisition participation caused stock price volatility and negative market impact, the financial capability of the acquirer has become crucial."
Even if the court or lead manager thoroughly reviews Ssangbangwool’s proposal and informs KG, the likelihood of a change in acquirer is minimal. It is reported that KG Group is even considering offering more than its original acquisition amount. Its key affiliate KG Chemical has over 300 billion KRW in cash assets, and it is actively raising nearly 500 billion KRW through affiliate sales. An affiliate engaged in media business is providing free advertising for Ssangyong Motor’s new car launching next month. KG Group’s active quantitative and qualitative support for Ssangyong Motor’s rehabilitation is expected to send a positive signal to creditors.
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