Ssangyong's Acquisition Deal With Edison Motors Falls Through: Report

SsangYong Motor, the debt-ridden Korean carmaker that's owned by India's Mahindra & Mahindra, has reportedly said that a deal for its acquisition by electric bus maker Edison Motors has failed. According to reports, the latter failed to meet the payment deadline, and the contract was cancelled. As per the deal, Edison Motors was supposed to pay 274.3 billion won or Rs. 1716 crore, by March 2022, to acquire SsangYong. The Seoul Bankruptcy Court ordered Edison Motors to pay the balance on March 25, however its failure to do so has led to the termination of the contract.

Also Read: Edison Motors To Buy SsangYong From Mahindra For $255 Million

Edison Motors had earlier paid 30.5 billion won, or over Rs. 190 crore, to SsangYong, which was about 10 per cent of the acquisition cost. The remaining amount was to be paid by March 25, before the creditors' meeting on April 1, 2022, in order to decide on a rehabilitation plan for the company. carandbike has reached out to Mahindra & Mahindra for more details, however, at the time of publishing this story our email remained unanswered.

Edison Motors had earlier paid 30.5 billion won, or over Rs. 190 crore, to SsangYong, which was about 10 per cent of the acquisition cost

According to South Korean media, Edison Motors had requested the court to delay the creditors' meeting, so that it could buy time for the payment. But SsangYong decided not to wait for Edison, considering the already delayed timeframe and urgency of the business recovery. SsangYong Motor said it would seek a new owner as soon as possible. Now that the deal has fallen through, a legal battle is expected between the two companies over the 30.5 billion won paid by Edison as the down payment for the acquisition.

Mahindra originally acquired SsangYong in 2010 bringing it back from near bankruptcy at the time. The company did attempt several turnaround strategies, however, SsangYong's worsening financial health prompted the Indian auto giant to finally let go of the company. The Korean firm has been under court receivership since April 2021 after several attempts by Mahindra, to secure a buyer in time failed.

Source: The Investor