SEOUL — Debt-laden South Korean automaker SsangYong Motor named a group led by a six-year-old electric vehicle startup as its preferred bidder on Wednesday, as it seeks to make a fresh start under a new owner.
SsangYong said it chose the Edison Motors-led consortium, which includes a South Korean investment fund, based on such factors as the offer price, its members’ fundraising strength and future plans. The deal is estimated to be worth about $260 million, according to industry sources.
SsangYong is under court receivership and needs court approval for the sale. SsangYong and and the consortium are expected to ink a final agreement by the end of November.
Founded in 2015, Edison makes electric buses and is developing commercial trucks. It sees SsangYong as a potential foothold in the passenger car market, and aims to mass-produce passenger EVs at the automaker’s only automobile factory in Pyeongtaek.
SsangYong was a core unit of SsangYong Group, a South Korean conglomerate that was broken up by the Asian financial crisis of 1997. It was acquired by China’s SAIC Motor in 2004, then by India’s Mahindra & Mahindra after entering a court receivership in 2009.
The automaker has struggled to make a lasting recovery. Its output dropped 20% in 2020 to about 106,000 vehicles, and it filed to enter its current receivership in December.
SsangYong is one of five passenger vehicle producers in South Korea, along with Hyundai Motor, Hyundai affiliate Kia, GM Korea and Renault Samsung Motors.
Despite are being part of leading global automaker groups, GM Korea and Renault Samsung have struggled with low factory investment and other setbacks, partly owning to chronic disagreement with labor unions. Their output languishes at low levels similar to SsangYong’s.