Mahindra In Talks With An Investor For Majority Stake In Ssangyong; Hopes To Close Deal In February

The company is looking to sign the term sheet in the coming week after which further talks will see the company selling its majority stake to the investor.

By Ameya Naik

1 mins read

Published on January 2, 2021

Highlights

Mahindra has been looking for investors to take up majority stake in Korean UV maker Ssangyong. Mahindra, currently holds a 74.65 per cent stake in SsangYong which it invested in 2010. It was earlier reported that HAAH Automotive Holdings Inc was looking to buy majority stake in SsangYong but Mahindra has not confirmed this development yet. When asked about it Dr. Pawan Goenka, Managing Director, Mahindra said, "We are in serious talks with an investor. I cannot divulge the name yet because of certain clauses, but we hope to close the deal by February 28, 2020." Also Read: Mahindra To Focus On SUVs, Electric After Ending Ford JV Talks Mahindra currently holds a 74.65 per cent stake in SsangYong Speaking to the media, Anish Shah, Group President, Mahindra Group too reinforced this point saying, "Mahindra would cease to be a majority shareholder by the end of this fiscal year. And that is something that we are committed from a capital allocation standpoint." The company is looking to sign the term sheet in the coming week after which further talks will see the company selling its majority stake to the investor. Mahindra will become a minor shareholder. The Korean carmaker, Ssangyong, has been reporting losses for 15 consecutive quarters and struggling to pay back its debts. It's reported that, HAAH is expected to invest about 550 billion won in SsangYong, the minimum amount required to normalise operations for the UV maker. Under the deal, the Korean automaker will see investments coming in from China's Chery Automobile Company that partly owns HAAH Automotive. Also Read: Ford, Mahindra Call Off Auto Joint Venture Ssangyong has been reporting losses for 15 consecutive quarters and struggling to pay back its debts Mahindra & Mahindra's board had rejected the proposal to infuse a fresh investment of 230 billion Won in SsangYong to resurrect operations for the automaker in April 2020. Instead, the board allowed an investment of only 40 billion Won in the company, SsangYong had to raise an additional $147 million by selling its service centres to an asset management company.