India’s Mahindra & Mahindra, the parent company of Ssangyong Motors, announced that it would complete the sale of its stake in Ssangyong Motors by the end of next month.
According to India Business Today on the 3rd, Pawan Goenka Mahindra (Chairman of Ssangyong Motor’s Board of Directors) said, “We are negotiating with potential investors to sell Ssangyong Motor shares and aiming for next week” at a press conference held on the 1st (local time) in India. “We are hoping to finish working on a term sheet.” A term sheet is an agreement that contains the key terms and conditions for the transaction, and can only be created with a significant approach to opinions between Mahindra and investors. President Goenka did not reveal who the’potential investor’ is.
Mahindra, which acquired Ssangyong Motors at KRW 522.5 billion in 2011, accumulates a deficit, and in April of last year, it stopped additional investment in Ssangyong Motors and declared abandonment of its position as a major shareholder in June. Since last year, investment negotiations have been held with the US automobile retailer HAAH Automotive, but on December 21 of last year, Ssangyong Motor’s debt delinquency and legal management have been carried out with little progress. Ssangyong Motor has secured time for self-debt reconciliation with its debts frozen until the 28th of next month with the’Autonomous Restructuring Assistance (ARS) Program’ approved by the Seoul Rehabilitation Court immediately after filing for legal management. When a deal with Mahindra is made with a’potential investor’, Ssangyong Motor plans to lower its stake in Ssangyong Motor to less than 30%, releasing both management rights and the position of major shareholder. However, if the deal is not successful, Ssangyong Motor will enter court management in full 12 years after 2009 and will be at a crossroads between normalization and liquidation of the company.Go to reporter page>
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