Ssangyong Motor, the possibility of canceling the main contract… “Now the ‘ball’ is Ssangyong Motor”
Edison Motors caught up in a lack of funding… Investment attraction ‘difficult’
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(Seoul = Yonhap News) Reporter Choi Pyong-cheon = Edison Motors sold Ssangyong Motor[003620] The acquisition itself was in danger of failing as the balance of the acquisition price might not be paid within the deadline.
Ssangyong Motors union and commercial creditors oppose Edison Motors’ takeover of Ssangyong Motors, and as the purchase price has not been paid, it is predicted that Ssangyong Motor will terminate the M&A contract within this month.
According to industry sources on the 27th, the Edison Motors Consortium failed to pay the balance until the 25th of this month, the due date for the payment of the balance of the acquisition price.
Previously, the Seoul Rehabilitation Court ordered Edison Motors to pay the full amount of the acquisition price 5 business days before the meeting of related parties.
Since the scheduled date for the meeting of the concerned parties was April 1, Edison Motors had to pay the balance of 274.3 billion won, excluding the 30.5 billion won paid as a down payment, by the 25th of this month.
The assembly of interested parties is an assembly in which creditors, etc., decide on a rehabilitation plan including a debt repayment plan using the purchase price as a financial source. If the acquisition price is not paid, the reorganization plan is meaningless, so no meetings with related parties are held.
Ssangyong Motor has the right to terminate the M&A contract with Edison Motors due to non-payment of the acquisition price. If the contract is terminated as it is, there is a possibility that Edison Motors will not be able to get the deposit back.
An official familiar with the sale of Ssangyong Motors explained, “The ‘gong’ has now passed to Ssangyong Motors.
If Ssangyong Motor decides not to terminate the contract and the assembly of related parties is postponed or if the acquisition price is paid later, the acquisition process may continue, but the industry believes that the contract termination is more likely.
Edison Motors strongly requested the postponement of the assembly schedule before the balance payment deadline, but Ssangyong Motor is said to have taken a negative stance on the postponement. Opposition to the postponement of the schedule can be interpreted as a position to terminate the contract if the acquisition price is not paid.
The fact that unions and commercial creditors are opposing the acquisition on the grounds of Edison Motors’ financial power also weighs on the possibility of contract termination.
An industry official said, “The failure of a prospective takeover to raise the payment for a related party cannot be a reason for postponement of a related party meeting.” said.
Ssangyong Motor is expected to receive related permission from the court following deciding whether to terminate the contract by the end of this month.
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Edison Motors plans to continue the acquisition work by delaying the assembly of related parties.
Edison Motors initially planned to raise funds for the acquisition by attracting FIs (financial investors), but it is having difficulties in raising funds.
The formation of the Edison Motors consortium for the acquisition of Ssangyong Motors, as well as the person who will pay the acquisition price, has not been confirmed. Accordingly, only Edison Motors and Edison EV were specified as members of the consortium to acquire Ssangyong Motor shares in the rehabilitation plan.
Private equity fund Keystone PE had already left the consortium, and private equity fund KCGI said that it had not been able to confirm an investment method such as securing a stake in Ssangyong Motor or lending money.
Edison EV, an affiliate of Edison Motors, which was supposed to play a key role in financing the acquisition in a situation where it was having difficulties in securing FI, suffered an operating loss for four consecutive years and was in danger of being designated as a management item.
An Edison Motors official said, “U&I is the largest shareholder of Edison EV.[056090]”We will attract investment through the
If the acquisition of Edison Motors fails, Ssangyong Motor will have to start looking for a new owner once more. It is expected that the M&A will be pursued once more through limited competitive bidding or private contracts with court permission.
Ssangyong Motor entered the corporate rehabilitation process in April of last year and selected the Edison Motors consortium as the preferred bidder for the acquisition in October of the same year.
At that time, the Cardinal One Motors (a new HAAH Automotive Corporation) consortium and Indie EV also participated in the bidding for Ssangyong, but Edison Motors, which had the best conditions such as the acquisition price and financing ability, was decided as a right-hand partner.
Considering that many companies, such as SM Group, who showed interest in the acquisition did not participate in the main bid last year, some analysts say that it will be difficult to find a new acquirer even if the M&A is pursued once more.
Even if an acquirer appears, it is unknown whether it will offer better conditions than Edison Motors, and in the worst case, there is a possibility that the company will be liquidated.
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2022/03/27 06:31 Send
