Potential buyers to start due diligence on SsangYong Motor this week KCGI joins Edison Motors-led consortium

Translated by Kim So-in 공개 2021-08-11 08:03:04

이 기사는 2021년 08월 11일 08:01 더벨 유료페이지에 표출된 기사입니다.

Potential buyers of South Korea’s ailing carmaker SsangYong Motor are expected to conduct due diligence on the company this week after the preliminary round of bidding received strong response.

SM Group, which is considered the strongest candidate, plans to visit SsangYong’s Pyeongtaek plant as early as next week while Edison Motors has added a new investor alongside Keystone Private Equity (PE), showing its strong intention to acquire the carmaker.

Potential buyers started their preliminary due diligence last week, industry sources said on Monday. They reviewed documents via a virtual data room as SsangYong’s summer vacation season started and plants were shut down.

Candidates are expected to start their due diligence in earnest from this week. SM Group plans to review documents in more detail this week and plans to visit the Pyeongtaek plant next week.

The Korea Corporate Governance Improvement (KCGI) fund recently came aboard the consortium that Edison Motors formed with the Keystone PE.

Edison Motors has maintained its growth trajectory since 2018, recording revenue of 89.8 billion won ($78.1 million) and an operating profit of 2.8 billion won in 2020. Keystone PE and KCGI are expected to reduce the company’s acquisition burden.

The sale of SsangYong is expected to keep the positive momentum as bidders like SM Group and the Edison Motors-led consortium show serious intention to buy.

But there may be an issue with SsangYong’s Pyeongtaek campus after the city of Pyeongtaek asked the company to disclose the site relocation decision process and draw up a plan to return profits from the sale of the site to citizens earlier this month.

SsangYong’s Pyeongtaek plant, built on an 860,000 square-meter site, is operating three assembly lines. As of March, the appraised value of the site was 681.4 billion won, but industry sources said the market value is as high as 1.5 trillion won.

SsangYong signed a memorandum of understanding with the city government of Pyeongtaek regarding the sale of the site in July. The carmaker plans to sell the current plant and build a new factory to focus on electric vehicles in the same city. (Reporting by Gyoung-tae Kim)
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