Ssangyong Motor Will Be Sold to Chinese Company

China’s biggest state-run petrochemical company, Nanxing Group, is likely to be chosen as the most-preferred bidder for Ssangyong Motor Co. which has been undergoing a debt workout program.

Samil Accounting, which is in charge of arranging the Ssangyong sale, yesterday recommended the petrochemical company to creditors, saying that Nanxing Group received the highest score among the auto companies which applied for the bid. Chohung Bank and other creditors will confirm a preferred bidder within this week by collecting more than 75 percent of agreement from the creditors.

Nanxing Group, which was established in 1984, is now composed of some 100 companies, including three listed corporations. Zhongche Auto Service Co., one of the group’s affiliate, produces military jeeps and operates car maintenance services.

Nanxing offered 11,000 won per share, which is similar to the Korean automaker’s current stock price (10,900 won per share). The company will take over 48.9 percent among the 55.4 percent stake that was put up at the international auction. Total sales price will amount to 650 billion won.

The creditors will sign an MOU with Nanxing Group by the end of this month and conclude a formal contract in the first quarter of next year after thorough consideration for two to three months.

In its bidding offer, Nanxing Group said that it would make Korea as the company’s manufacturing and R&D center and would secure the employment. The Chinese company also said the current executives would remain, and it will participate in the decision-making process through a board of directors.

Nanxing also said that it will “invest one billion dollars in strengthening Ssangyong’s manufacturing equipment and R&D sector by investing 700 million dollars by 2010 and in expanding Zhongche Co.’s service network to 10,000 branches in China by investing 300 million dollars.”

Suk-Ho Shin Na-Yeon Lee kyle@donga.com larosa@donga.com