Ssangyong Motor in Talks With Potential Foreign Buyer

Ssangyong Motor in Talks With Potential Foreign Buyer. October. 19, 2009 05:01. tesomiom@donga.com.

Ssangyong Motors said yesterday that it is in talks with a foreign company that could buy the troubled Korean carmaker.

If a domestic court approves a revival plan for Korea’s smallest automaker on Nov. 6, the company will appoint by early December a lead manager for the sale via an open bidding. Ssangyong entered bankruptcy protection in February after controlling shareholder Shanghai Automotive Industry Corp. abandoned the money-losing carmaker.

Lee Yoo-il and Park Yeong-tae, two court-appointed managers at Ssangyong, told reporters in Incheon that the company is contacting a few “advanced companies” from overseas for its sale, denying that they are Chinese or Russian companies.

“The companies that have shown interest have been slow to assume a presence in the Asian market, and don’t have conflicting automobile manufacturing platforms with Ssangyong that can help positive synergy in future development strategies,” Lee said.

Expressing optimism that the court will approve Ssangyong’s revival plan, Lee suggested that there are investors willing to give money to keep the carmaker afloat.

A Ssangyong source said parts suppliers, the carmaker’s biggest creditors, want Ssangyong to survive, while its main lender Korea Development Bank will also find it difficult to urge liquidation.

The source added that creditors holding the carmaker’s convertible bonds are expected to hold a meeting around Wednesday to narrow differences.

Ssangyong’s managers also showed optimism that the company will earn pretax profits next year

Lee said Ssangyong aims to sell 45,000 vehicles in the domestic market and export 40,000 next year. The company needs to sell at least 72,000 units per year to break even.

Ssangyong also presented a blueprint for its future strategy, pledging to introduce a hybrid model and an electric car within five years. In addition, it plans to unveil a series of new models to replace existing ones, shifting the focus of its lineup from mid and full-size sport utility vehicles to mid and small-size crossover utility cars.