South Korean clothing manufacturer Ssangbangwool (SBW) said it had submitted a letter of intent (LOI) this week to acquire Ssangyong Motor Company, ahead of an auction for the bankrupt South Korean automaker which is scheduled to take place later this month.

SBW claimed it was the only company to submit a LOI by the 9 June deadline set by Ssangyong’s leading court appointed administrator EY Hanyoung. It would fight it out with the leading consortium led by local chemicals and steel firm KG Group in an auction scheduled to take place on 24 June.

The auction would be in the form of a “stalking horse” bid, whereby the leading suitor makes a preliminary bid for the company ahead of the auction. If a higher price is offered by any other bidder during the auction, the leading bidder will be asked if it is prepared to match the highest price to win the auction.

The KG consortium was said to have submitted an initial bidding price of KRW900bn (US$711m) while SBW’s opening offer was understood to be KRW800bn which it would need to increase. This is still way in excess of the KRW305bn bid made by Edison Motors earlier this year which collapsed in March after the company failed to complete the acquisition.

Ssangyong shares were suspended last December after the automaker’s auditor, KPMG Samjong, declined to offer an opinion for the company’s 2021 financial report due to mounting multi year losses.

The automaker increased its global sales by over 25% at 39,610 units in the first five months of 2022, helped by a strong rebound in exports from weak year-earlier levels.