Ssangyong Motor to speed up resale… “Completion of corporate rehabilitation procedures at the end of August”
With the preliminary due diligence of companies seeking to take over Ssangyong Motor, which is undergoing corporate rehabilitation (statutory management) procedures, the resale of Ssangyong Motor is expected to accelerate.
According to the investment banking industry on the 9th, Ssangyong Motor and EY Hanyoung Accounting Corporation, the organizer of the sale, will receive conditional takeover proposals by the 11th. Ssangyong Motor and the sales manager completed preliminary due diligence on the 4th with the participation of KG Group, Ssangbool Group, Pavilion Private Equity (PE), and EL B&T.
Ssangyong Motor plans to announce the sale in June, conduct the main bid, and select the final buyer at the end of June. The goal is to sign an investment contract with the final acquirer in July and submit the rehabilitation plan to the court to receive approval from the court at the end of August. As Ssangyong Motor started the rehabilitation procedure on April 15 of last year, according to the law, the liquidation can be avoided only by completing the rehabilitation procedure by October 15, which is within one year and six months.
The key to resale is the ability to mobilize funds. This is because the Edison Motors Consortium, which was previously the preferred bidder for Ssangyong Motor, failed to deposit the acquisition funds within the contract period. The industry estimates that the resale of Ssangyong Motor will cost 400 billion won to 600 billion won, which is more than Edison Motors’ 304.9 billion won.
However, there are also forecasts that Ssangyong Motor’s delisting on the stock market may become a stumbling block. Ssangyong Motor has requested an extension of the improvement period from the Korea Exchange. The Korea Exchange is planning to hold the KOSPI Listing Disclosure Committee (Commerce and Industry Committee) by the 17th to decide whether to maintain the listing of Ssangyong Motor or grant an improvement period (within one year).
Considering that the resale process is in progress, the industry believes that Ssangyong is highly likely to be given an improvement period. This is because if Ssangyong Motor is delisted, the resale process may be disrupted as it will be difficult for acquirers to attract external funds.
Meanwhile, the resale of Ssangyong Motor is carried out in a stalking-horse method, a conditional merger and acquisition (M&A). In this method, a conditional investment contract is signed with the preferred buyer, and if there is no underwriter who offers better contract terms through an open bidding, the preferred buyer is confirmed as the final buyer.
The manager of Ssangyong Motor and Hanyoung Accounting Firm will review the submitted conditional takeover proposal and select a prospective conditional takeover person within this week. Ssangyong Motor and the owner of the sale believe that if the resale proceeds as planned, the corporate rehabilitation process will be completed by the end of August.
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]