It’s all merry and hunky-dory for the Indian auto major Mahindra and Mahindra. The final hurdle in the deal with ailing South Korean automobile manufacturer Ssanyong Motor Co has been given the nod by its creditors and also the shareholders giving a green light for the rehabilitation plan floated by Mahindra, on Friday.
According to media report in the far-eastern country of South Korea has reported that the group of large creditors has given their approval to the Mahindra deal. Mahindra and Mahindra last year inked a deal with Ssanyong to buy 70% of the latter’s stake for US $463 million. Out of the total $463 million, $85 million was financed by way of corporate bonds while the rest $ 378 million in new stocks.
The report further mentioned that 10% of the total amount has already been paid by M&M and the rest was due to be paid in the first week in month of February. The Indian auto major is contemplating to close the deal and finish off the acquisition as soon as March 2011. Large creditors like the Barclays Bank and KDB (Korean Development Bank) have reportedly had a meeting in the South Korean capital of Seoul this Friday in their bid to finish off the deal. Dr. Pawan Goenka, President- Auto and Farm sector at Mahindra and Mahindra was quoted as saying that this was the only formidable roadblock facing the deal. With this hurdle passed, there can be potentially no holding back of the time here on. Joint receiver at Ssanyong, Yoo-Lee was quoted as saying that Mahindra and Mahindra’s strengths in research and development, international footprint will enable the ailing company to emerge as a new global player in the SUV segment. The deal is touted to help Mahindra and Mahindra to gain a strong foothold in the premium SUV segment through the platforms of Ssanyong, while on the other hand the Ssanyong will make good on the Research and Development infrastructure of its Indian partner.
It has also been reported that Mahindra and Mahindra is sketching its plan to assemble Ssanyong’s models such as the Korando and Rexton domestically.
