KG Group merger to acquire SsangYong Motor

KG Group merger to acquire SsangYong Motor

SEOUL, May 13 — A consortium of KG Group and private equity fund Pavillon has been selected to apply to acquire automaker SsangYong Motor Co., according to a ruling by the Seoul Bankruptcy Court, this Friday.

This consortium led by the KG group submitted 900 billion won (about 674 million euros) for the takeover while the SBW group offered 800 billion won. Therefore, SsangYong Motor chose the KG group which presented the best offer.

KG Group will get 500 million won by selling its energy and environmental division of its subsidiary KG ETS for 400 million in cash.

SsanYong Motor has a debt of 1.5 trillion won and needs 300 billion won annually for normal operation. He will sign a purchase agreement with the consortium for conditional investment and launch a formal tender to complete this transaction.

SsangYong plans to complete the transaction as early as next July and will then submit the proposal to creditors for approval. But it is unclear whether the lenders will accept the buyout plan as they rejected a 1.75% down payment proposal made by Edison Motors, the previous bidder that failed to acquire SsangYong due to lack of funds.