SEOUL, South Korea — Cash strapped South Korean automaker Ssangyong Motor selected India's top utility vehicle maker Mahindra & Mahindra on Thursday as the preferred bidder to buy a majority stake.
Three companies — Mahindra, Raghav Industries and Daewoo Bus — submitted binding bids earlier this week out of the six bidders that qualified in June to examine Ssangyong Motor's accounts and business, Ssangyong said Thursday.
The car maker went into court-approved bankruptcy protection early last year amid falling sales and mounting red ink. It was majority-owned by Shanghai Automotive Industry Corp., or SAIC, one of China's largest vehicle manufacturers, until SAIC lost management control during the bankruptcy process.
Ssangyong Motor Co., South Korea's fifth-largest automaker, is far smaller than domestic rivals Hyundai Motor and Kia Motors Corp. It mostly manufactures light SUVs, but also makes a luxury sedan, the Chairman.
"We made our decision after evaluating the offered bidding prices, fund-raising capability, management plans after acquisition, job guarantee for current employees and other terms," Ssangyong said in a statement.
Mahindra will pay Ssangyong a deposit of 5 percent of the acquisition price it offered and Ssangyong and its top executives will sign a memorandum of understanding with the Indian company by the end of this month.
Ssangyong did not reveal how much Manhindra will pay for the stake, but South Korea's Yonhap news agency reported, without citing the source of the information, that Mahindra offered $480 million.
The Indian sport-utility vehicle maker will conduct a final due dilligence on Ssangyong next month before settling on an acquisition price in October. The final contract is scheduled to be signed in November.