US automotive distributor HAAH Automotive Holdings is preparing to submit a binding offer to invest in SsangYong Motor, according to media reports here Thursday.
Experiencing a liquidity crisis, SsangYong Motor’s major stakeholder, India’s Mahindra Group, announced it will lower its stake from the current 75 percent to less than 50 percent, and that it is willing to give up its top shareholder position if it finds a new investor.
A bidder makes a binding offer to acquire a company after the due diligence phase ends. HAAH Automotive, a California-based company that imports vehicles for the US market, is reportedly expected to submit the offer next month.
While industry watchers believe HAAH Automotive does not have the funds to acquire enough stocks to become the major shareholder, it may be supported by Chery Automobile, a Chinese automobile firm that reportedly owns shares of the importer.
HAAH might also be seeking to acquire some portion of SsangYong’s stocks to supply its vehicles to North America, considering the rising popularity of sport utility vehicles there. SsangYong specializes in SUVs, with its flagship G4 Rexton, Tivoli and Korando.
Mahindra withdrew its plans to inject 230 billion won ($194 million) into Ssangyong earlier this year, and the automaker has been struggling from declining sales.
The company has reported net losses for 14 quarters. In the second quarter this year it posted a net loss of 8.85 billion won.
By Jo He-rim (firstname.lastname@example.org