HAAH Automotive prone to submit remaining funding proposal for SsangYong Motor in 10 days, Auto Information, Automobilnews
HAAH Automotive Holdings, a California-based import automobile distributor is predicted to submit its remaining funding proposal within the subsequent 7-10 days for SsangYong Motor Co., saving the money strapped South Korean carmaker from going out of business. If the deal is made, HAAH Automotive Holdings would emerge as one of many majority stakeholders of SsangYong Motor, lowering Mahindra & Mahindra’s possession in SsangYong Motor to beneath 50 per cent from the present 74.65 per cent.
Mahindra’s board moved a particular decision at its AGM to cut back its shareholding in SsangYong to lower than 50%, a sign of a brand new investor coming in fairly than a whole promote out. The board final April rejected a Rs 3,300 crore turnaround plan for SsangYong, pushing the Korean automobile maker into deep monetary insecurities.
Knowledgeable sources say the intention is to shut the deal this month in order that car exports to North America can begin from October, permitting SsangYong Motor to make an inroad into the U.S. market.SsangYong didn’t reply to ETs queries on the potential bid supply.
Chris Hosford , spokesperson of HAAH Automotive mentioned it is not going to reply to market hypothesis and rumours.
HAAH Automotive Holdings ,will probably be buying numerous car assemblies from Chery which, together with elements sourced in North America will probably be assembled in an American manufacturing unit the place the ultimate autos will probably be produced. These merchandise will probably be bought below the model identify VANTAS in North America, the Haah spokesperson mentioned
Haah clarified that Chery has no funding in HAAH, and that Haah has a technical cooperation with Chery.
Sources near the event instructed ET that HAAH could not have the funds for to change into a significant shareholder of SsangYong with solely 23 billion received in annual gross sales, with SsangYong needing 500 billion received to normalize its operations. .
International banks servicing SsangYong’s loans have knowledgeable that if Mahindra cedes a controlling stake, it could jeopardise refinancing of its loans with the client having to clear all excellent dues earlier than taking management. As of finish March, SsangYong has USD 322.4 million short-term loans, to be repaid earlier than a yr with 167 billion received from JP Morgan, BNP Paribas and Financial institution of America.
Mahindra had ready a proposal earlier this yr to infuse 230 billion received in SsangYong, nevertheless it’s board rejected the proposal final April, as an alternative infusing simply 40 billion received, sufficient to run operations for 3 months. Within the face of rising debt, SsangYong bought one in all its service centres positioned within the Guro district in Seoul to an asset administration firm, elevating $147 million.
Just lately, SsangYong’s exterior auditor refused to signal its monetary assertion, citing discrepancies and its “uncertain existence” even because the automaker posted a 98.6 billion received ($82.3 million) working loss within the first quarter of 2020, and is prone to sink deeper into the crimson within the second quarter.