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(LEAD) Underwear firm Ssangbangwool submits LOI for SsangYong

All News 16:32 June 09, 2022

(ATTN: UPDATES with details in paras 9-10; CHANGES headline; ADDS stock prices in last 2 paras)

SEOUL, June 9 (Yonhap) -- South Korean underwear company Ssangbangwool said Thursday it has submitted a letter of intent (LOI) to acquire SsangYong Motor Co. with an auction scheduled later this month to find a new investor.

SsangYong's lead manager EY Hanyoung accounting firm received LOIs from interested companies for SsangYong until 3 p.m. Thursday. Ssangbangwool was the sole participant.

"We are planning to join the auction on June 24," a Ssangbangwool spokeswoman said over the phone.

SsangYong plans to select the final bidder in the stalking horse bid in which the preliminary bidder suggests its price for SsangYong ahead of the auction, and other bidders submit their prices in the auction.

If a company submits a price higher than the stalking horse's price, SsangYong will ask the stalking horse if it can pay the highest bidding price to buy the carmaker.

In May, SsangYong selected a local consortium led by chemical-to-steel firm KG Group as the preliminary bidder for SsangYong, which has been under court receivership since April 15, 2021, after its Indian parent Mahindra & Mahindra Ltd. failed to attract an investor amid the COVID-19 pandemic and its worsening financial status.

This file photo provided by SsangYong Motor shows its plant in Pyeongtaek, Gyeonggi Province. (PHOTO NOT FOR SALE) (Yonhap)

This file photo provided by SsangYong Motor shows its plant in Pyeongtaek, Gyeonggi Province. (PHOTO NOT FOR SALE) (Yonhap)

Last month, four firms -- KG Group, Pavilion PE, EV parts maker EL B&T and underwear company Ssangbangwool -- competed to become the preliminary bidder for SsangYong in the stalking horse bid. KG and Pavilion PE formed a consortium after submitting LOIs.

SsangYong and EY Hanyoung accepted the KG-led consortium as preliminary bidder as the consortium beat others in terms of acquisition price, fundraising plans, and employment guarantee period.

The KG consortium and Ssangbangwool reportedly suggested bidding prices of 900 billion won and 800 billion won, respectively, for SsangYong.

The KG consortium and Ssangbangwool are vying for SsangYong in the upcoming auction.

The new auction comes two months after local electric bus maker Edison Motors Co. failed to make a full payment of 304.8 billion won (US$249 million) for the debt-laden carmaker by the March 25 deadline.

The court extended the deadline for SsangYong to find a new owner and submit a new restructuring plan by six months until Oct. 15.

SsangYong aims to select a preferred bidder at the end of June, sign a deal in early July, submit its rehabilitation plan to the court in late July and obtain the court's approval for its restructuring plan in late August.

China-based SAIC Motor Corp. acquired a 51 percent stake in SsangYong in 2004 but relinquished its control of the carmaker in 2009 in the wake of the global financial crisis.

In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.

SsangYong's lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.

SsangYong said it will receive preorders for the all-new Torres SUV, developed under the project name of J100, from Monday.

On Thursday, Ssangbangwool spiked by the daily permissible ceiling of 29.91 percent to 860 won, and its affiliate Kanglim Co., a special-purpose vehicle maker, also jumped 29.87 percent to 2,565 won. The broader KOSPI fell 0.03 percent to 2,656.44.

Trading of SsangYong shares has been suspended since Dec. 21, 2020. KPMG Samjong declined to offer its opinion for its 2021 financial report due to snowballed losses. SsangYong posted net losses for six consecutive years through 2021.


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