[wheelguy]

The move comes amid calls to Mahindra for injection of funds into the Korean co with mounting losses.

Mumbai: Mahindra & Mahindra’s Korean subsidiary SsangYong Motor Company has started preliminary talks with a couple of global auto majors to explore strategic partnership and investment as it looks to revive its bottomline, people close to the development said.

The talks could involve technology transfer and SsangYong may offer a minority stake, they said.

The development comes in the wake of calls from financial institutions to Mahindra to inject more funds into the South Korean firm, given its deteriorating bottom line. SsangYong’s net losses had more than tripled year on year to about $160 million (185.5 billion won) during the first nine months of 2019. The company has posted operating losses for 11straight quarters now.

“We are working with the local management to evaluate all options to generate funds for the company, including support from Korean Development Bank, third party investment and further infusion of equity by Mahindra,” Pawan Goenka, chairman at SsangYong, told ET.

Source: ET Auto

[TusharK]

Earlier this month, there were reports suggesting that Mahindra was planning to revive Ssangyong with an investment of US$ 380-425 million. In response to these reports, Mahindra has issued a clarification.



Official statement:

The Board of SsangYong has approved a 3 years business plan which leads to profitability of the company in the year 2022. This plan requires outside funding of 450-500 billion KRW (USD 380 – 425 million) over a period of three years. About half of this amount is to repay the existing loan and the remaining is to augment the capex required for new product development. Funds required are expected to be generated by a combination of fresh bank loans, new investment and further equity investment by Mahindra. No equity proposal has been put up to the Mahindra Board of Directors as on date. A proposal will be presented to the Board and a decision will be made only after Mahindra management has vetted the plan and evaluated its feasibility.

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