Ssangyong creditors, shareholders approve the deal with M&M

Published On Jan 29, 2011 05:59 PM By Vikas for Mahindra Bolero 2011-2019

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Mahindra & Mahindra and Ssangyong Motors deal has been given a green signal from Sangyong creditors and shareholders. The final nod has been given to ‘amended rehabilitation plan' or rehabilitation plan.

As per the sources, the creditors and shareholders of Ssangyong Motors have agreed to the deal which has paved the way for both the auto mobile makers to go ahead with the deal. The Indian utility maker stamped on an agreement to purchase 70 per cent of the share of Ssangyong for $463 million, $378 million in new stocks and the rest of the amount will be financed via corporate bonds.

The sources also stated that M&M has already given 10 per cent of the amount and the remaining 90 per cent will be paid by the first week of February. As per the reports, both the parties will conclude the final acquisition by March 2011. M&M revealed in a statement that the creditors and shareholders of Ssangyong Motors have passed the rehabilitation plan with majority. This has taken M&M one step ahead in closing the deal.

As per the reports, major creditors which include names like Korean Development Bank, Barclays Bank met in the capital city of South Korea to finalize on the deal. After the approval, Ssangyong can now seize the two year long rehabilitation process which started in February 2009. The reports also mentioned Pawan Goenka, President- Auto and Farm Sectors of M&M stating that at this stage there could have been a probability of no to the agreement. But now mere formalities are left.

As per Yoo-Il Lee, the Joint Receiver in Sangyong deal, Mahindra's global name, its R&D development centers will help it in carving a global edge name in the SUV market. Both the auto companies expect to gain high with the deal as M&M will take advantage of the SUV technology with Sangyong platforms whereas Ssangyong will be helped with huge investments and M&M's R&D centres. As per the recent news, Mahindra is planning to assemble Rexton and Korando, the super SUVs from Ssangyong in India.