A Seoul court dismissed an injunction filed by Edison Motors Co. against SsangYong Motor Co. seeking to prevent resale of the distressed carmaker, but the renewed sale process hit another legal stumbling block as defeated candidates accuse the winning consortium for colluding in price offer.

The Seoul Central District Court on Wednesday rejected an injunction filed by Edison Motors against SsangYong Motor to block resale and cancel contract suspension.

During provisional trial last month, Edison EV and Edison Motors claimed that “Edison EV and SsangYong Motor and its sales manager agreed to put off congregation but SsangYong Motor ignored it and informed of contract cancellation.” The court, however, dismissed the claim.

In January, Edison EV formed a consortium and signed a merger and acquisition (M&A) investment contract with SsangYong Motor. The company, however, was not able to pay remaining 274.3 billion won ($216 million) balance – taking out 30.5 billion won in contract deposit – by March 25 deadline and was informed of contract cancellation by SsangYong Motor.

On April 14, the Seoul Bankruptcy Court accepted SsangYong Motor application and allowed it to seek resale before rehabilitation plan approval.

The resale process however is still in choppy waters.

Last week, SsangYong Motor and its sales advisor EY Hanyoung chose KG Group-led consortium as stalking-horse bidder. It beat out two other contestants Ssangbangwool Group and EL B&T by offering the highest bid of an estimated 900 billion won.

The Kwanglim consortium joined by Ssangbangwool filed an injunction with the Seoul Central District Court to nullify the choice by accusing the winning team of price collusion as KG Group and Pavilion PE who separately prepared for bidding formed a consortium at the last minute.

The Ssangbangwool-Kwanglim consortium nevertheless will see through the remaining sale process and challenge the stalking bidder.

SsangYong Motor plans to select a preferred bidder in June before signing a final contract in early July. It plans to hold a congregation in the end of August and seek creditor approval for its rehabilitation plan.

By Pulse

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]