Edison Motors, an automotive company based in the US, has reportedly sealed the deal to take over South Korean automobile manufacturer SsangYong Motor, as the latter faced bankruptcy.
A SsangYong Motor representative stated on Monday that a Edison Motors’ led consortium will petition for a court approval to buy a controlling interest in the bankrupt automobile manufacturer that day, which was the deadline issued by the bankruptcy court. That same day, the bankruptcy court gave the two parties permission to sign a purchase contract.
According to a SsangYong representative, the two have finalized an official investment arrangement following the granting of the court approval. The two parties continued with the contract-signing formalities on Monday after the court granted permission.
Last November, Edison, and SsangYong had signed a memorandum of understanding (MOU) for said acquisition, which was completed two months later. Earlier, the two parties had clashed over the deal amount.
Edison proposed a reduction in the acquisition fee from SsangYong, claiming that the likelihood of insolvency had been established during the due diligence phase. The two parties subsequently agreed to reduce the price of taking ownership of SsangYong by ₩5.1 billion, resulting in a final price of ₩304.8 billion (US$254.7 million).
SsangYong will now get a ₩15 billion performance bond from Edison. When the MOU was signed last year, Edison had already paid ₩15.5 billion to the South Korean automaker. The total 30.5 billion is approximately 10% of the overall takeover amount of ₩304.8 billion.
Edison will now have until March 1st to present its rehabilitation plan to the nation’s bankruptcy court, demonstrating that it can resolve SsangYong's financial issues.
SsangYong Motor might gain momentum again by shifting its focus from SUVs to environmentally friendly automobiles, thanks to the new investor.
SsangYong also recently announced that bookings for its future electric SUV Korando e-Motion have begun. SsangYong confirmed that its first electric vehicle will be available in the Korean market in March, with prices ranging from ₩38.8 million ($32,355) to ₩43.9 million.