Many sectors have been affected by the chip crisis that has erupted all over the world. While companies are working hard to respond to the demands in this process, they realize that this will not be possible after a certain period of time, and they slow down production seriously.
The automotive industry was also greatly affected by this process. The car dealerships, which were filled to the brim a few years ago due to the extremely slowdown in production, do not have almost brand new vehicles today. SsangYong, one of the manufacturers that suffered from this situation, recently agreed with the Edison Motors Consortium.
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SsangYong cancels contract with Edison Motors
Continuing its activities actively in our country, SsangYong decided to change hands after the financial problems. However, according to the latest statement, this deal has not been completed. SsangYong Motor Company (SYMC) announced the cancellation of the (M&A) Investment contract signed with Edison Motors Consortium on January 10, 2022.
The Edison Motors Consortium was expected to deposit the balance by March 25 (five working days before the date of the creditors meeting) for the takeover, but failed to do so in that time. After signing the purchase agreement with Edison, SsangYong submitted an improvement plan to the court on February 25, 2022.
The plan included reimbursement of improvement claim and changes in shareholders’ rights upon receipt of full payment for the takeover. The court set the date of the creditors’ meeting as April 1, 2022, to discuss and decide on the improvement plan.
With the expiration of the investment contract with Edison, SsangYong will seek a new investor and submit a new improvement plan to the court within the statutory period. The situation of SsangYong Motor Company has improved since the M&A process began in June 2021, mainly due to:
- The company will launch the new J100 model at the end of June.
- The plan to move strongly towards the marketing of electric vehicles (EVs) has progressed well. The first EV E100 launched in September 2021 and strategic partnership with the world’s leading EV company BYD has been established, now the new U100 model is scheduled for the second half of next year.
- An additional 30,000 units will be exported annually as a result of the construction of a CKD facility in Saudi Arabia, which was built in partnership with SNAM and will begin production from 2023.
- A significant increase in export orders from overseas markets corresponds to more than 13,000 pending orders. This means that if the global supply problem of semiconductors eases, business will normalize allowing two production shifts to resume.
Buyer Young-won Jung commented, “Such an improvement in business conditions increases the future value of the company and attracts more competitive buyers. We will make every effort to ensure resale as soon as possible, not only to address the concerns of our partners, but also to lay a solid foundation for the long-term growth of the company.
So what do you think about this subject? Do you think SsangYong will be able to get out of the crisis he is in and return to his old days? Give your feedback in the comments section or SDN ForumYou can share it with us.