A consortium led by South Korea’s Edison Motors will acquire a controlling stake in SsangYong Motor Company, ending Mahindra & Mahindra’s fruitless attempts to make the troubled SUV maker a profitable buy-out.
A bankruptcy protection court gave its nod to the consortium, which has agreed to pump in 305 billion Won ($254.65 million) into the debt-laden SsangYong
Edison Motors will be SYMC’s fifth owner since its formation more than seven decades ago. Since its acquisition in 2010, SsangYong has been a troubled unit for M&M almost every year despite several attempts by the latter to turn it around.
SYMC has been in court receivership since April of last year. This was preceded by a year-long attempt by M&M to find a buyer for SYMC. Following a hard financial review by the M&M management in view of Covid-19, the company decided against investing any further in SYMC in mid-2020. SYMC had sought infusion of $406 million. M&M took an impairment hit of ₹1,210 crore on the SYMC investment in the last financial year.
Losses for 19 quarters
The cash-strapped Korean company has posted losses for 19 consecutive quarters and has been struggling to stay afloat. It even sold non-core assets to generate liquidity in 2020, after M&M declined to inject new funds.
Between January and September 2021, SYMC sales crashed 21 per cent to 84,496 units compared to the same period in the previous year. It posted an operating loss of 238 billion won during the same period.
Founded in 1998 Edison Motors is a 100 per cent electric vehicle maker. It has so far built a multi-seater passenger bus and a mini-truck, both battery powered.