Mahindra, Ruia submit bids for Ssangyong-Yonhap

Mahindra, Ruia submit bids for Ssangyong-Yonhap

Seoul: Three groups including Mahindra & Mahindra Ltd have made binding offers to buy troubled South Korean car maker Ssangyong Motor Co Ltd, Yonhap news agency reported on Tuesday.

But Renault-Nissan had not submitted a bid for the cash-strapped sport utility vehicle (SUV) maker, sources close to the matter said.

The decision by Renault-Nissan not to bid for Ssangyong suggests the alliance could look for another way to increase production capacity in South Korea, either through expansion of its existing Renault Samsung plant or a greenfield investment.

Ruia Group and a South Korean company had submitted bids for the maker of the Rexton SUV, Yonhap reported, quoting Samjong KPMG and Macquarie Group Ltd, which are handling the sale. Ruia controls tyremakers Dunlop Ltd and Falcon Tyres.

Officials from Samjung, Macquarie and Ssangyong declined to comment on the report, while officials from Mahindra and Ruia were not available.

A South Korean court planned to pick preferred bidders this week, a Ssangyong spokesman said.

On 7 August, Mahindra said its board of directors had approved the submission of a binding bid to buy a majority stake in Ssangyong as it seeks to become a major global utility vehicle maker.

Sources said on 5 August that the company was willing to pay up to $400 million to acquire Ssangyong.

Ssangyong, which has been under court-led restructuring since early 2009, has debts of about 740 billion won ($637.9 million), another company spokesman said.

Six groups including Renault-Nissan and Mahindra have been reviewing Ssangyong’s books for a deal worth up to $500 million.

With an about 2% share of the South Korean auto market, Ssangyong exports to Asia-Pacific and European countries as well as Africa, the Middle East and South America.

Mahindra is scheduled to launch its Scorpio pick-up in the US market later this year and has been investing in light and heavy trucks, two-wheelers and electric vehicles.

Analysts in South Korea said Ssangyong may help Mahindra develop technology and add to its vehicle line up.

Ssangyong sold 43,811 vehicles in the first seven months of the year, 235.2%jump from a year ago.

For the first quarter, Ssangyong reported that its net loss narrowed by more than 90 percent from a year earlier.

Shares in Ssangyong ended Tuesday up 0.33% at 15,200 won, outperforming the market’s 0.5% fall.