Mahindra may sell SsangYong for $260 million, near half of what it bought it for
Struggling South Korean automaker SsangYong has hardly ever had going buttery smooth and despite a long string of owners, remains in a pensive state. Bought in 2011 by Mahindra and Mahindra for around $463.6 million, reports suggest it is now being sold to consortium led by South Korean automaker Edison Motors in a deal believed to be worth just $260 million.
The Nikkei reported that the debt-struck SsangYong has confirmed Edison Motors-led consortium has been chosen by it even though it needs court approval for the eventual sale. It is expected that the agreement will likely reach its concluding stage by end of next month.
Edison Motors was founded in 2015 and in its short six years' existence, has made electric buses and is now entering commercial trucks' business. Taking over SsangYong may help it enter and expand presence in the personal vehicle space.
But it may be anything but easy.
SsangYong was an integral part of SsangYong Group which was hit hard by the Asian financial crisis of 1997. Daewoo would take a controlling stake the same year before, in 2004, China's SAIC bought a 51% stake. Losses reached such a high level that the company went under court receivership in 2009.
Mahindra and Mahindra would eventually waltz in with a 75% stake but in recent times, has reportedly held back fresh investments. SsangYong was again put up for sale last year.
While SsangYong has clearly walked through stormy weather, it remains doggedly determined. The company in June showcased an off-road SUV codenamed X200 as it looks to benefit from a growing preference for SUV body shape.