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(LEAD) Court approves KG consortium as final bidder for SsangYong

All News 15:07 June 28, 2022

(ATTN: UPDATES with details in paras 7-14; CHANGES headline)

SEOUL, June 28 (Yonhap) -- A Seoul court on Tuesday approved SsangYong Motor Co.'s decision to select a local consortium led by chemical-to-steel firm KG Group as the final bidder for the debt-laden carmaker.

In the latest auction, the KG consortium beat underwear company Ssangbangwool in the overall criteria of acquisition prices, fundraising plans and financial status, the Seoul Bankruptcy Court said in a statement.

Last week, Ssangbangwool submitted its bid to compete with the KG consortium, the preliminary bidder, to acquire the South Korean unit of Indian carmaker Mahindra & Mahindra Ltd.

In May, SsangYong picked the KG consortium as the preliminary bidder for the carmaker 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.

The KG consortium reportedly plans to acquire SsangYong for 950 billion won (about US$740 million) that includes an operating capital of 600 billion won.

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

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 for the debt-laden carmaker by the March 25 deadline in the previous bid.

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 sign a deal with the KG consortium 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 has been under court receivership since April 15, 2021, after Mahindra failed to attract an investor amid the COVID-19 pandemic and its worsening financial status.

SsangYong's lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs. It plans to launch the all-new Torres SUV in the domestic market next month and export it initially to Chile later this year.

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 snowballing losses. SsangYong has posted net losses for six consecutive years through 2021.

kyongae.choi@yna.co.kr
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