SOUTH KOREA: Competitors circle for Ssangyong control - report

By just-auto.com editorial team | 17 November 2003

At least seven competitors from South Korea and overseas are vying for a controlling stake in South Korea's fourth largest car maker Ssangyong Motor Co., according to a Yonhap Infomax report, Dow Jones reported.

"There aren't big bidders like GM or Ford, but car makers from China, India and Europe who are in the sports-utility vehicle business or planning to advance into the field are interested in Ssangyong Motor," an unnamed source from Chohung Bank, the company's creditor bank, told the news service.

Dow Jones said Chohung Bank is the main creditor of Ssangyong Motor, which has been under a debt workout programme since it broke free from Daewoo Group, which was dissolved in 1999, though bank officials declined to comment on the report.

Dow Jones said that, earlier this month, Chohung Bank had named Samil Accounting to lead an international auction to sell the entire 55.4% stake owned by Korean creditors.
Bidders have been asked to submit letters of intent to acquire Ssangyong Motor by Wednesday and detailed proposals by December 2, the report added.

According to Dow Jones, the Korea Economic Daily reported on Saturday that state-run China National Bluestar Group plans to bid for Ssangyong Motor.

An official at China National Bluestar Group told Dow Jones Newswires that its wholly owned subsidiary Chonche Auto Service Group is "talking with Korean Ssangyong Motor for various cooperations, including a possible acquisition of Ssangyong's stakes".

The official reportedly said she didn't know whether Chonche Auto Service Group will participate in the intentional auction or how much of the stake Chonche may buy.

According to its website, Dow Jones said, Chonche Auto is a combination of more than 30 companies formerly serving China's People's Liberation Army which specialises in vehicle repair and maintenance, vehicle components producing and ship making and repair.

Creditors have said they will select a buyer based on the bidding price, financial capability and business strategies, Dow Jones said.

The report said Ssangyong Motor specialises in SUVs, taking up 40% of the local SUV market as of October while, according to the Korea Automobile Industry Association, Ssangyong Motor accounted for 9.7% of the overall domestic car market in the January-October period, with sales of 108,512 units.