HAAH likely to package investment offer for SsangYong Motor this week

2020.09.14 11:22:06 | 2020.09.14 11:22:34

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California-based import car distributor HAAH Automotive Holdings reportedly is planning to submit its proposal this week to make a major investment in South Korea’s SsangYong Motor Co., a move that is expected to help the cash-strapped Korean carmaker avoid being put under court protection.

According to investment banking sources on Sunday, HAAH Automotive Holdings is in final talks with the SUV-focused carmaker’s largest shareholder Mahindra & Mahindra and unions to package an investment offer this week. It is said to be aiming to close the deal within September to start necessary work for SsangYong Motor’s vehicle exports to North America in October.

The investment is estimated to reach hundreds of millions of dollars, according to sources. As of Sept. 11, the market capitalization of Kospi-listed SsangYong Motor stood at 648.8 billion won ($547.9 million).

If a deal is made, HAAH Automotive Holdings would emerge as one of majority stakeholders of SsangYong Motor, allowing Mahindra & Mahindra to reduce its ownership in SsangYong Motor to below 50 percent from the current 74.65 percent. The Indian parent company has recently made it official that it would give up its majority holding in the Korean unit due to its own financial trouble and the poor sales performance of SsangYong Motor.

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With HAAH Automotive Holdings’ investment, SsangYong Motor is expected to make an inroad into the U.S. market.

SsangYong Motor shares rose 4.27 percent to 4,515 won ($3.81) in Seoul at 9:58 a.m. Monday.

However, market analysts remain cautious about HAAH Automotive Holdings’ offer, raising questions about the capital strength of the U.S. firm.

HAAH Automotive Holdings, founded in 2014, is a U.S. distributor for Chinese brand vehicles, targeting a niche for affordable Chinese cars in the U.S. import car market mostly dominated by German and Japanese brands.

The company reportedly is partially owned by China’s Chery Automobile Co.

By Lee Jong-hyuk and Lee Ha-yeon

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