The court abolished the Ssangyong Motor rehabilitation plan, which included a debt repayment plan using the Edison Motors acquisition proceeds. As the takeover of Edison Motors failed, Ssangyong Motor went through the resale process from the beginning.
On the 29th, the Seoul Rehabilitation Court ruled to exclude the rehabilitation plan submitted by Ssangyong Motor. A meeting with related parties scheduled for April 1 has also been canceled.
The decision comes after Jeong Yong-won, manager of Ssangyong Motor, reported the cancellation of the investment contract with Edison Motors the day before. After confirming that the Edison Motors consortium had not paid the balance of the acquisition price, the court investigator submitted an investigation report to the court stating that there is no possibility of the implementation of the previously submitted rehabilitation plan by Ssangyong Motor.
SsangYong Motor’s existing rehabilitation plan includes the content that only 1.75% of the 547 billion won of rehabilitation bonds will be reimbursed in cash for the purchase price and the remaining 98.25% will be converted to equity, and Edison Motors’ plans to secure a stake in the future.
However, due to difficulties in financing, Edison Motors’ acquisition of Ssangyong Motor was canceled. Edison Motors failed to comply with the court’s order to pay 274.3 billion won, the balance of the acquisition price, before 5 days before the date of the meeting with Edison Motors.
Edison Motors asked Ssangyong to postpone the rally, but it was not accepted. In the end, Ssangyong Motor announced on the previous day, “The M&A investment contract was canceled because the Edison Motors consortium did not deposit the purchase price due on March 25.”
The court will notify creditors and shareholders of the cancellation of the assembly and receive a new rehabilitation plan from Ssangyong Motor. The submission deadline is May 1.
A legal battle between Ssangyong Motors and Edison Motors over the cancellation of the contract is also anticipated. Edison Motors and Edison EV filed an injunction application with the Seoul Central District Court on the same day to suspend the effect of the cancellation notice of Ssangyong Motor’s M&A investment contract. They also filed a claim to ban Ssangyong Motor’s withdrawal of 30.5 billion won as a down payment.
Ssangyong Motor said that it will re-promote the sale process, expecting that new competitive candidates will appear as the company value has improved as the company value has improved as a significant part of the opacity on major management issues has been removed. According to Ssangyong Motor’s rehabilitation procedures, a new rehabilitation plan must be approved by October 15th.
Reporter Jin Seon-min