Sale Talks in Stalemate
India's Mahindra & Mahindra, the largest shareholder of SsangYong Motor has declared that it will pull out of the negotiations over the sale of SsangYong Motor.
Mahindra & Mahindra reportedly halted its talks with HAAH Automotive of the United States about selling its stake in SsangYong Motor to the potential new invetor. The two companies failed to iron out their differences over the terms of the sale during the last negotiation.
Mahindra has pulled out of the talks and may not return to the negotiation table, a well-informed industry insider said.
HAAH is expected to continue its talks with domestic creditors on the premise that SsangYong Motor will be put under a rehabilitation program. Analysts say that HAAH seems to be thinking that court approval of a rehabilitation program for SsangYong Motor will facilitate its acquisition of the troubled automaker, given that the court will order capital reduction and debt readjustment.
SsangYong Motor filed for court receivership in December 2020 due to a liquidity crisis. The court decided to apply the autonomous restructuring support (ARS) program to the automaker before putting it under a rehabilitation program.
If SsangYong Motor starts rehabilitation procedures as HAAH wants, a restructuring of its workforce will be inevitable. This is why SsangYong Motor is hesitant to start the procedures.
SsangYong Motor is already standing at the edge of a cliff. It has decided to delay payment of 50 percent of the wages for January and February.