Edison Motors and Ssangyong Motor ink takeover deal

Ssangyong Motor Co. has finally found a new owner.

South Korea’s bankruptcy court approved Ssangyong Motor Co. and electric carmaker Edison Motors Co. Monday afternoon to sign a contract for the latter’s acquisition of the much bigger but troubled automaker. 

Earlier that day, a Ssangyong Motor official said an Edison Motors-led consortium filed for a court approval to acquire a controlling stake in the debt-ridden carmaker. Edison is poised to submit its rehabilitation plan to the bankruptcy court by March 1 to prove it can overcome the auto giant's financial woes.

The takeover deal will be finalized after Edison pays out the remaining acquisition fee of 274.3 billion won ($229.3 billion) and gains approvals from more than two-thirds of Ssangyong creditors.

In mid-September, Edison formed a consortium with Seoul-based Keystone Private Equity, activist fund Korea Corporate Government Improvement Fund (KCGI,) and Semisysco Co. for Ssangyong with a bidding price of 280 billion won.

After much negotiations, the two sides agreed that Edison Motors will pay 304.8 billion won and buy 60 million new Ssangyong shares at 5,000 won per piece. When the takeover is complete, the consortium will have a 95% stake in Ssangyong. 

KGCI will have 34 to 49% of the new shares. Edison Motors and its subsidiary EdisonEV Co. will acquire the rest. 

Edison Motors and Ssangyong Motor will discuss how to best utilize the operating capital of 50 billion won. Industry insiders say the two sides will decide which direction Ssangyong will take in EV development and ways of improving the designs of combustion engine vehicles. 

Also on Monday, Ssangyong announced it began taking reservations for its latest electric SUV dubbed Korando e-Motion. The EV model has been available in Europe since last year. 

Priced between 40.6 million and 45.9 million won, it will be available domestically from March. With government subsidies and tax benefits for environmentally friendly cars, the electric vehicle can be purchased for just under 20 million won. 

On Kosdaq, EdisonEV finished Monday’s trade at 28,400, up 30% from a day prior.

Write to Hyung-kyu Kim at khk@hankyung.com
Jee Abbey Lee edited this article.