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Ssangyong draws HAAH and electric bus, scooter makers

Including $500 mn in liabilities, the SUV maker's price tag is estimated at $900 mn

By Jul 30, 2021 (Gmt+09:00)

Ssangyong draws HAAH and electric bus, scooter makers
Ssangyong Motor Co., a troubled South Korean sports utility vehicle maker, has drawn nine preliminary bidders, including a US automobile distributor and South Korean manufacturers of electric buses and electric scooters.

California-based HAAH Automotive Holdings Inc., which had sought to buy a 51% stake in Ssangyong for $250 million earlier this year, is one of the bidders that submitted letters of intent by the Friday deadline, according to investment banking sources.

Ssangyong, 75% owned by India’s Mahindra and Mahindra Ltd., has been under court receivership since April of this year, after it defaulted on loans. 

Its buyer is required to take over the SUV maker's liabilities worth 600 billion won ($522 million), including employees’ retirement pay, which would lift its estimated price tag to 1 trillion won ($900 million)

EY Korea, managing the sale, will review the candidates between Aug. 2 and 27 and select a preferred negotiator around September. It is aiming to complete the sale by year's end.

Other bidders include South Korea's manufacturing- to shipping-focused SM Group, electric bus manufacturer Edison Motors Co. and electric scooter maker K Pop Motors Co.

SM Group has been growing through aggressive acquisitions of troubled companies since its foundation in 1988. It expects Ssangyong to help boost the group's manufacturing business ranging from batteries under the brand of Bexel to chemical materials and automobile plastic parts.

Back in 2010 when Ssangyong was sold to Mahindra, the parent of merchant liner SM Line Corp. had also expressed interest in the SUV maker. SM Group is seeking to finance a possible purchase of the carmaker with IPO proceeds from SM Line.
 
HAAH Automotive is an auto startup established in 2014 by Duke Hale, a former vice president of Volvo, Mazda, Jaguar and Land Rover. After acquiring Ssangyong, it plans to sell the Korean carmaker's SUVs and pickup trucks in the US and Canada. Its negotiations with Mahindra to acquire a 51% stake in Ssangyong had broken down earlier this year, after failing to narrow the price gap with Mahindra.

Ssangyong is currently producing seven SUVs including the Korando Emotion, its first EV.
Semisysco's electric vehicle (Courtesy of Semisysco)
Semisysco's electric vehicle (Courtesy of Semisysco)


Alongside HAAH and SM Group, Edison Motors is touted as a strong candidate. The electric bus manufacturer participated in the bidding in a consortium with Seoul-based Keystone Private Equity. They have attracted Semisysco Co., a small two-seater EV maker and one of Semisysco's minority shareholders as financial investors as well.

Edison Motors was formerly the eco-friendly vehicle business of Hankuk Fiber CO., a defense equipment and rolling stock company. After acquiring Ssangyong, the bus manufacturer aims to beat Tesla Inc. in the global EV market. 

K Pop Motors, an electric scooter maker, has unveiled a plan to turn Ssangyong’s diesel cars into EVs. In April of this year, K Pop said it would finance its Ssangyong Motor purchase through a Nasdaq listing within the year. Industry sources played it down as an implausible plan

As part of self-rescue efforts, Ssangyong has decided to sell its car plant in Pyeongtaek which is expected to bring in 900 billion won in cash. Ssangyong estimates its value as a going concern at 620 billion won.
Write to Jong-woo Kim at jongwoo@hankyung.com

Yeonhee Kim edited this article.

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