A Seoul court said Friday that it picked chemical conglomerate KG Group as the preferred bidder to acquire SsangYong Motor, a debt-ridden carmaker whose recent takeover by a local electric automaker fell apart.
“We’ve looked at whether the bidder could really deliver the cash promised, given the fiasco months ago when the deal fell apart because of that,” SsangYong Motor said.
The KG Group-led consortium, which includes Pavilion Private Equity, has enough cash to make the purchase, an official at SsangYong Motor said.
The group, which has no experience in running auto businesses, is believed to have offered to pay up to at least 600 billion won ($468 million), twice the amount electric carmaker Edison Motors had reportedly promised, but failed, to deliver in the initial bidding two months ago.
But the chemical conglomerate faces a tough road ahead before it takes over the debt-ridden carmaker, since the court is looking to hand over the company in a stalking horse bid, where other interested bidders could win the bid if they offer more than the starting bid or minimally accepted offer.
The decision will be made in June.
Meanwhile, the Korea Exchange said it decided to extend the grace period for SsangYong Motor, whose shares were suspended from trading in December 2020. The bourse operator chose to put the carmaker on a grace period instead of delisting in April 2021, and renewed it until the end of this year.
The carmaker, which is still banned from trading shares until the period runs out, is expected to deal with liquidating underperforming divisions even if it finds the new owner in June. The carmaker has few electric car models and is believed to need massive outside investment to catch up with its rivals in EVs.
By Choi Si-young (siyoungchoi@heraldcorp.com)