Ruia Group to bid for south Korean SsangYong Motor (Lead)

August 8th, 2010 - 9:47 pm ICT by IANS  

Kolkata, Aug 8 (IANS) City-based Ruia Group Sunday said it will make a bid to acquire troubled South Korean SsangYong Motor Company, whose technological competence overseas presence make it an attractive buy.
“Ruia Group is indeed bidding for SsangYong. This has been decided at a meeting today (Sunday) presided by Pawan Kumar Ruia, chairman, Ruia Group,” the Group said in a statement.

The Ruia Group and Mahindra & Mahindra are the two Indian corporations among the six suitors shortlisted to bid for the bankrupt South Korean firm SsangYong Motor.

The last date for bid submission is August 10.

Mahindra & Mahindra Saturday said the board had approved the company’s plan to submit a binding bid for a majority stake in Ssangyong.

The Ruia Group chairman Thursday hinted at the possiblity of the group bidding for Ssangyong, whose present market cap is $400 million.

Both the Ruia Group and M&M have been eying Ssangyong for its technology and access to markets overseas, where car prices and profit margins are said to be higher.

Ssangyong, which has about two percent of the South Korean market, exports to Russia, Europe, China, Middle-East, Africa, North and South America and the Asia-Pacific.

Ruia said the group was now minutely evaluating four issues - future cash flows of Ssangyong, profitability of the carmaker, stand-alone manufacturing capacity of the plant and the territories where the company had a presence and the possible expansion of these markets.

M&M is bidding for Ssangyong so that it could add sports utility vehicles Rexton, Kyron and Actyon and Chairman sedan to its portfolio and access markets in south Korea, Russia and Western Europe.

The other firms are in the race are Renault-Nissan, South Korea’s private equity fund Seoul Invest and Daewoo Bus.

In December 2009, the Seoul Central District Court had approved the debt-ridden SsangYong’s restructuring plan.

Media reports say SsangYong has run up a debt of $1 billion. The Chinese carmaker Shanghai Automotive Industry Corp (SAIC) had earlier had failed to turn it around and reduced its stake from a majority 51 percent to 3.8 percent.

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