(Maekyung DB)

KG-Pavilion Selected as a Candidate for Ssangyong Motor Acquisition…KG ETS Stock Soaring

(Maekyung DB)

KG Group and Pavilion PE have been selected as candidates for the new acquisition of Ssangyong Motor. 47 days after the takeover of the Edison Motors consortium failed, Ssangyong Motor once again had a chance to revive.

On the morning of the 13th, the Seoul Rehabilitation Court announced that it had selected the KG Group and Pavilion PE consortium as the prospective takeover of Ssangyong Motor. Ssangyong Motor is said to have made this decision after intensively examining not only the amount of the acquisition but also the proof of funds.

In addition, after examining future business plans, such as conversion to electric vehicle production, and plans to raise operating funds after the acquisition, the loan of operating funds before the acquisition was specified as a condition of the acquisition. The industry predicts that the acquisition price of Ssangyong Motor will be between 400 billion won and 600 billion won.

The resale of Ssangyong Motor is carried out in a ‘stalking hose’ method to shorten the schedule. This refers to a method in which a conditional investment contract is concluded with a prospective acquirer and, if there is no candidate who offers better contract terms through an open bidding, the preferred buyer is confirmed as the final acquirer. The deadline for the sale of Ssangyong Motor is October 15, and the final acquisition target is expected to be determined at the end of June, next month.

Meanwhile, related stocks are showing sharp fluctuations day after day in relation to the selection of a preliminary acquirer for Ssangyong Motor. On the 12th, just before the selection, the stock prices of the affiliates of the KG group rose sharply, while the stock price of the Ssangbull Group showed a sharp decline, and the stock prices diverged sharply. In particular, KG ETS surged 8.96% on the 10th, followed by the upper limit on the 12th, and on the 13th at 2:10 pm, it is trading at 22,050 won, up 10.25% from the previous day.

On the other hand, Kwanglim, a shareholder of Ssangbangbang Group, fell 645 won (-20.74%) on the 12th, and is trading with an additional 16% decline as of 2:10 pm on the 13th. The stock price of Ssangbull is also trading at 655 won, down 7.61% at the same time on the same day.

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