The acquisition has fallen through after the EV startup failed to pay the outstanding balance.
Korean carmaker SsangYong is back on the market again after a planned acquisition fell through. This is according to The Investor, which reports Edison Motors had failed to pay the remaining 274.3 billion won (approximately $224 million) balance. A Korean bankruptcy court had ruled that the EV startup had to hand over the aforementioned sum before March 25.
SsangYong and Edison Motors reached an agreement in January, whereby the latter would gain a controlling stake in the struggling automaker. SsangYong is currently under the control of India's Mahindra & Mahindra. Sources close to the matter say Edison battled to cough up the remaining balance, with key investors pulling out of the deal. The company also failed to attract additional financial investors. The company reportedly paid 10% (around $25.1 million) of the total amount.
Reports now indicate that SsangYong is already on the lookout for a new buyer, though. Previously, Edison's CEO Kang Young-kwon had hoped to invest as much as $837 million to revive SsangYong, transforming the company into a carmaker fit to take on big automotive players, such as GM and Tesla. It would have been an ideal match; SsangYong has said in the past that it wants to reposition itself as a maker of electric vehicles.
With Edison's industry expertise and SsangYong's wider reach, the partnership could have, quite possibly, bore fruit. Despite its massive financial woes, the Korean carmaker is readying the J100, a rugged-looking off-roader with a striking resemblance to several well-known SUVs, like the Land Rover Defender. It is not known whether Edison will reattempt the merger with a new set of investors.
It's very unlikely; The Investor further reports that the two companies are expected to duke out the dispute in court, over the down payment Edison made as part of the deal. Industry experts told the Korean publication that the pair may try to pin the blame on each other. Edison has already said that SsangYong remained uncooperative throughout the deal. Furthermore, Edison added that it was the company's reluctance - not financial issues - that stifled the full payment.
Edison Motors may be a relative newcomer to the industry, but the seven-year-old company already produces electric buses and is currently developing a range of battery-powered commercial vehicles. It may have needed SsangYong's market presence to enter key markets, with several planned models including a powerful EV sedan known as the Smart S, but SsangYong needs an injection of cash to survive too. Hopefully, an agreement is reached soon or SsangYong's 68-year story will come to an unfortunate end.