Mahindra & Mahindra gained’t get proceeds from SsangYong sale


The proposed sale of the troubled Korean SUV maker SsangYong Motor Firm (SYMC) gained’t fetch its largest shareholder Mahindra & Mahindra (M&M) any proceeds. SYMC has been underneath a court-led rehabilitation course of since December 2020.

Consortium’s supply

M&M has been knowledgeable by a court-appointed receiver {that a} consortium led by South Korean electrical bus maker Edison Motors Co. has agreed to amass SYMC for 304.858 billion gained (about ₹crore) by means of a major fairness funding.

“Topic to a rehabilitation plan reflecting the phrases of the Edison Motors Co’s funding being permitted at an events’ assembly of SYMC which is anticipated to happen in some months from now and pursuant to major funding by Edison Motors Co. and sure anticipated capital restructuring undertaken as a part of the rehabilitation technique of SYMC, the corporate’s holding in SYMC will cut back,” M&M mentioned in an announcement.

The Edison-led consortium has requested for a stake of 95 per cent in SYMC in opposition to their funding and SYMC has agreed to make finest efforts to fulfill the mentioned request.

Whereas M&M holds 74.65 p.c in SYMC, the Mumbai-based firm ceased consolidating SYMC and its subsidiaries as subsidiaries from December 28, 2020 and has categorized it as discontinued operations. SYMC and its 4 subsidiaries, nevertheless, are thought of as subsidiaries of M&M underneath the Firms Act, 2013.

“The Firm is not going to obtain any consideration on account of the proposed major funding being made by a consortium led by Edison Motors Co in SYMC,” M&M clarified.

The supply made by the Edison-led consortium is sort of the identical as M&M’s buy value inked in late 2010. The Mumbai-based SUV specialist had paid ₹2,100 crore ($462 million on the then alternate charges) for a 70 per cent stake in SYMC. The SYMC buyout was the most important outbound deal by M&M.

Write-off

Throughout FY20, M&M wrote off investments of round ₹2,000 crore it made in SsangYong after placing its whole stake within the Korean firm on the market in February that 12 months. Additionally, in April 2020, M&M introduced that it’ll not make any additional investments in SYMC and declined SYMC’s request for fund infusion following the enterprise disruption brought on by the Covid-19 pandemic.

Mahindra and SYMC collectively developed the X100 platform which noticed the delivery of the Mahindra XUV300 compact SUV in India and the SsangYong Tivoli in Korea. Mahindra additionally experimented with launching the SsangYong SUV underneath its namesake model. The Alturas premium SUV from Mahindra was a rebranded SsangYong G4 Rexton.



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