|Main entrance of SsangYong Motors manufacturing plant / Korea Times file|
By Kim Yoo-chul
Mid-tier local conglomerate SM Group has officially confirmed its interest in acquiring a controlling stake in the ailing SsangYong Motor, hoping to enter the burgeoning electric vehicle (EV) market'
The conglomerate, also known as Samra Midas, is engaged in the chemicals, construction, shipping and leisure businesses, and also owns a broadcasting company in the southeastern port city of Ulsan.
"SM Group has submitted a letter of intent (LOI) to the parties handling the sale of SsangYong Motor; but will thoroughly review whether to complete an acquisition of SsangYong Motor," an official from the group said Friday.
SM Group's vehicle component affiliate, Namsun Aluminum, will play a central role in managing the acquisition process, the official added. SM Group has been searching for a new growth engine by jumping into the promising EV sector. SM's affiliates, TK Chemical and Namsun, are involved in vehicle component production.
Back in 2010, SM had shown interest in acquiring SsangYong, but Indian car manufacturer Mahindra & Mahindra (Mahindra) beat it out.
A high-ranking SM executive said the group plans tap into some of its internal cash reserves to fiance the acquisition.
"We don't need any outside financial backing," the executive added. He declined to specify how much cash and cash-equivalent assets the group had on hand as of July this year.
EY HanYoung, a court-appointed advisor, plans to choose a preferred negotiator for the sale of SsangYong Motor by September this year and aims to have a final contract signed after due diligence by November.
HAAH Automotive Holdings and K Pop Motor are SM's chief rivals in the bid, while some private equity funds and electric bus manufacturer Edison Motors, are said to have approached local activist fund, Korea Corporate Governance Improvement (KCGI), for a joint purchase of the troubled carmaker.