The KG Group consortium has been picked as conditional preferred bidder for SsangYong Motor. “After gaining approval from the Seoul Bankruptcy Court, we have picked the KG Group consortium as a preferred bidder that will take over SsangYong before official announcement on merger and acquisition,” EY (Ernst Young) Hanyoung, the lead manager of the sell-off, said on Friday.
KG Group is a mid-size conglomerate that is controlling five listed companies including KG Chemical and KG Steel and more than 10 unlisted companies. The company is ranked 71st by the value of fair asset (5.35 trillion won) as announced by the Fair Trade Commission. The consortium also includes Pavilion Private Equity, a private equity management firm, as a member.
According to auto industry sources, the KG Group consortium offered to pay about 900 billion won (about 700 million U.S. dollars) for the takeover. SsangYong Motor and EY reportedly conducted comprehensive assessment on the amount of bid price, rate of capital increase with consideration and demanded stake in SsangYong, and the duration of guaranteed employment of the automaker’s employees, before choosing the consortium as preferred bidder. In the invitation for bid for conditional takeover that closed on Wednesday, SBW Inc and EL B&T also submitted proposals.
SsangYong Motor will sign a conditional investment contract with the KG Group consortium next week. Thereafter the company will proceed with the sell-off process through “Stalking Horse,” a restricted competitive bid that will confirm the successful bidder through an open bid scheduled for next month.