M&M special board to decide on SsangYong bid on Thursday

M&M special board to decide on SsangYong bid on Thursday

New Delhi: Auto major Mahindra & Mahindra is understood to have convened a special meeting of its board on 15 July to decide its future course of action regarding acquisition of beleaguered South Korean firm SsangYong Motor.

SsangYong Motor (SM), which is mainly into manufacturing of sports utility vehicles (SUV) and recreational vehicles (RV), has shortlisted six bidders, including Mahindra & Mahindra (M&M), P K Ruia-led Ruia Group and a Nissan-led consortium, to carry out due diligence by 20 July.

According to industry sources, homegrown M&M has convened a special meeting of its board of directors to consider the acquisition of the bankrupt SsangYong Motor.

“The special board meeting has been called only to discuss on the bid for SsangYong, whether to go ahead with it, and if so then what should be the amount," a person in the know of the development said.

When contacted, an M&M spokesperson said: “We are undertaking the due diligence on SsangYong currently and will take a decision to bid at an appropriate time."

Last week M&M President (Automotive and Farm Equipment) Pawan Goenka had said that the company would take a final call on bidding the South Korean firm before 20 July deadline.

“We are still doing the due diligence. We will decide before the 20 July deadline whether we should go ahead or not, and if we have to go ahead, how much should we bid for," he had said.

SM, which has SUV models like ‘Rexton’, ‘Kyron’ and ‘Actyon’ and sedan ‘Chairman´, has been estimated to be worth up to $500 million. It is undergoing a court-led restructuring from 2009 after suffering heavily due to the downturn in auto industry.

Industry analysts had said M&M is interested in SM as the homegrown utility vehicle major can gain technological benefits from the range of SUVs that the South Korean firm has at its disposal.

In 2008, M&M had lost out to Tata Motors in the bid to acquire the British marque Jaguar Land Rover from Ford.

Meanwhile, the other Indian entity interested to acquire SM, the P K Ruia group, had sought more time to complete the due diligence.

The Kolkata-based group had said a special purpose vehicle, including Dunlop India and Falcon Tyres, would be formed if it were to go ahead to bid for the automaker.

China’s SAIC Motor Corp owns 10% in the troubled automaker and about 70% is held by creditors, led by state-owned Korea Development Bank.