China’s SAIC Buys Ssangyong Motors

The Ssangyong Motor Co. was sold to the Shanghai Automotive Industry Corp. (SAIC) for $500 million (approximately 550 billion won). Thus, the corporate restructuring of Korea’s automotive industry that began in the mid-1990s has come to an end.

Ssangyong Motor Co. creditors and SAIC officials met at Shilla Hotel in Seoul to finalize the sale of Ssangyong Motors Co. on October 28.

Chairman Choi Dong-su of Cho Hung Bank, Chairman of the Board Chen Xianglin, and CEO Hu Maoyuan were present during the sale.

SAIC will take over a 48.9 percent stake of Ssangyong Motors’ creditors for $500 million or 10,000 won per share.

Also, SAIC promised to retain all of Ssangyong Motors’ current workers, continuously invest to maintain or expand domestic sales and manufacturing facilities, prohibit auto imports from China, guarantee independent management, and maintain the Ssangyong brand.

On the other hand, the employees will also receive a certain amount in sales compensation.

Also for any additional insolvents, the amount that the Ssangyong Motor’s creditors will compensate SAIC has been set to a maximum of seven percent of the sales price.

After the Ssangyong Motors sale, with the exception of Hyundai-Kia Automobile group, all other Korean auto companies (basis of passenger car) have been taken over by foreign corporations.

SAIC is China’s largest state-run automobile company, manufacturing 600,000 vehicles annually.