Debt-ridden Mahindra-backed Ssangyong could be bought out by US firm HAAH
Mahindra and Mahindra have been trying to offload the Ssangyong brand for quite some time now and it seems to be that they have finally found a buyer in US-based firm HAAH. In the United States, HAAH Vehicle Holdings is an import automotive distribution company.
Mahindra acquired a 70 per cent stake in the Korean company in 2013. SsangYong's Indian owner, Mahindra and Mahindra, has been in negotiations with HAAH since last year to sell its controlling stake in the Korean firm as part of its worldwide reorganisation strategy following the Covid-19 outbreak.
HAAH Automotive Holdings founder Duke Hale said HAAH is the optimal company to acquire financially unstable SsangYong and will submit an LOI (Letter Of Intent) by Friday, a person familiar with the matter said over the phone. According to the Yonhap news agency, HAAH was supposed to submit its letter of intent to the Seoul Bankruptcy Court by March, but it failed to do so, creating concerns about its desire to invest in SsangYong.
Because a (Letter of Intent)LOI was not submitted, the HAAH CEO stated that the business required additional time to investigate SsangYong's financials before making an investment decision. And replying to the above statement, KPMG Samjong Accounting Corp, the auditor of SsangYong, declined to give its opinion on the carmaker's annual financial statements for the year 2020. If HAAH is successful in acquiring SsangYong, he said the California-based auto importer wants to introduce SsangYong's SUV models and pick-up trucks to the United States and Canada. SsangYong intends to accept letters of intent from potential buyers through Friday in the auction to find a new owner.
In 2004, China's SAIC Motor purchased a 51% interest in SsangYong, but during the global financial crisis of 2008-09, it surrendered control of the company in 2009. If SsangYong's accounting firm declines to provide an opinion on the business's yearly performance for the next year after the one-year term, the company might end up being delisted.
Text by Kenneth John