[Graphics by Song Ji-yoon]
California-based car importer HAAH Automotive Holdings has expressed will to fold its operation in China to raise funds to press ahead with the purchase of a controlling stake in South Korea’s bankrupt SsangYong Motor Co.
HAAH CEO Duke Hale has recently established Cardinal One Motors with the purpose of closing its business of importing Chinese vehicles and shifting focus in taking over the Korean car maker instead, according to the Korean automaker.
HAAH Automotive Holdings, founded in 2014, is a U.S. distributor for Chinese brand vehicles, targeting a niche market for budget Chinese cars. The company earlier unveiled a new American near-premium brand Vantas in technical cooperation with China’s Chery Automobile Co. But it decided to forgo the plan due to simmering conflict between the U.S. and China.
Foreign media reported earlier Tuesday that HAAH Automotive Holdings is seeking to liquidate its Chinese business. An unnamed official from SsangYong confirmed that Hale explained Cardinal One Motors was set up to go after SsangYong and that he has the backing of investors on the plan.
But whether the scheme raises the prospects for the company’s bid for SsangYong is uncertain, industry observers noted.
SsangYong creditors and the court have already excluded HAAH Automotive from the potential list due to its management issues following a series of resignations by senior executives, which have led the American car distribution company to suspend its earlier decision to invest in SsangYong Motor.
The Korean car maker under court protection had hoped to receive letters of intent within the month, but no feasible buyer has come forward. Including 390 billion won ($338.4 billion) debt it owed before the court protection, a new investor will have to bear a financial burden of up to 1 trillion won.
The court plans to proceed with the sale in a stalking-horse tender. SsangYong Motor is looking for a buyer that can replace its Indian parent Mahindra & Mahindra Ltd. which wants to exit from Korea.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]