SsangYong’s future in doubt as acquisition deal voided

Edison Motors's consortium take-over bid for SsangYong looks to be in doubt, with reports out of South Korea saying the deal has been cancelled.

According to Yonhap News Agency, SsangYong has walked away from the agreement after Edison Motors and its associates failed to pay the balance of US$226.5 million (AU$300.9 million) by March 25.

It’s believed under the terms of the acquisition deal, SsangYong will pocket the deposit – around US$25 million (AU$33.2 million).

The Seoul Bankruptcy Court has been overseeing the ownership transfer from Mahindra & Mahindra, and will likely have to approve SsangYong’s wish to void the contract due to the payment default.

Rumours of disagreements and infighting have emerged in the months since the deal was penned, with Keystone Private Equity pulling out of the consortium led by Edison Motors.

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SsangYong and Edison Motors are said to have been unable to agree on the management structure, while the Korea Herald reports SsangYong’s creditors were unhappy with the rehabilitation plan.

If the court grants SsangYong’s wishes, it could reset the clock and allow the company more time to find a new owner.

SsangYong has been pushing ahead with its move to an electric vehicle line-up, launching the Korando E-Motion in some markets, while the future model known as the J100 has been spied undergoing testing.