Mahindra's bid to sell SsangYong Motor hits roadblock as buyer fails to pay

Mahindra and Mahindra has announced that a deal to sell its bankrupt South Korean unit SsangYong Motor to electric car manufacturer Edison Motors has been terminated. According to Mahindra, Edison expressed its inability to deposit the bid amount to buy out SsangYong. This led to the termination of the deal.

In January this year, Mahindra had confirmed that SsangYong Motor will be bought by a consortium led by South Korean electric carmaker Edison Motors which had agreed to buy it for 305 billion won ($254.65 million).

Mahindra has been looking for a buyer to sell out its unprofitable South Korean unit after owning major stakes for 10 years since 2010. Mahindra has offered all or most of its stake in the South Korean company which it bought when SsangYong was on the brink of bankruptcy. Till end of September last year, Mahindra owned about 75 percent of SsangYong Motor.

Mahindra and Mahindra had acquired a controlling stake in the South Korean company SsangYong Motor back in 2010. However, by 2020, Mahindra stopped investing and SsangYong filed for bankruptcy. The South Korean carmaker has been under court receivership since April last year.

SsangYong Motor traces its roots to Dong-A Motor in the 1950s before it was taken over by SsangYong Business Group in 1988. Later, carmaker like Daewoo Motors and SAIC also owned the company before Mahindra and Mahindra took over 12 years ago.

SsangYong Tivoli was the first model to hit Indian roads after Mahindra took control of the company. However, sales numbers plunged massively to force Mahindra reconsider its stake in the company. Sales crashed to just a little over 84,000 in 2021, a drop of 21% from the previous year. Between January and September of 2021, the auto company had an operating loss of 238 billion Won from revenue of 1.8 trillion Won.