Mahindra, Ssangyong deal approved by creditors

Mahindra & Mahindra, it seems will soon take over the Korean auto company officially. Ssangyong Motors creditors that includes large power houses such as Barclays Bank, Korean Development Bank and others have given the green signal to the deal with the Indian company. It seems M&M will be able to acquire it by the last week of February or by March this year.

The Indian utility maker will take over 70 per cent stake in Ssangyong Motors  for $463 million. As per the new formed strategy, M&M's seven officials will work with Ssangyong Motors management team.

Dilp Sundaram the CFO at M&M, is one name which is being proposed to work with the Korean auto company. However, there is another formal approval awaiting from the secured and unsecured creditors and the 500 employees from Ssangyong Motors who are due to meet on 28th January in Seoul and after this protocol, next step from M&M is to seek an approval from South Korean Capital district court.

Ssangyong Motors will have a discusiion over the haircut they have agreed after the evaluations. However the Barclays Bank is one of the creditors which is insecure while Korean Development Bank is a secured leader.

Pawan Goenka, the President, Auto and Farm Equipment Division at M&M, said that the company is meeting with the creditors by the last week of January for the final approval and it is expected that the formalities will be soon over.

Initially Ssangyyong Motors suppliers gave the informal approvals first which later added on secured and unsecured creditors. The secured creditors gave informal approval in the beginning of this week. The South Korean auto giant labour union has stamped a tripartite deal with M&M and Ssangyong itself which contains employment protection provision.

Mahindra, India has already given 10 per cent of the final purchasing price mentioned in the final agreement which was stamped in November, 2010.  Mahindra &Mahindra hopes to complete the final take over by March 2011. The 80 per cent amount will be given after the court gives the approval.

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