Ssangyong Motor's major shareholder, India's Mahindra & Mahindra, has once again expressed its position to "get out of Ssangyong Motor." Mahindra acquired Ssangyong in 2011 and holds a 75 percent stake.
"We are looking for a new investor in Ssangyong Motor," President Pawan Goenka said at a conference call to announce its first-quarter earnings on June 12 (local time). He reaffirmed what he said in April when he announced the withdrawal of 230 billion won to invest in Ssangyong Motor.
Also, Anish Shah, vice president of Mahindra, said, "We will seek partnerships or give up business that shows no clear profitability." Ssangyong posted a net loss of 193.5 billion (some $161 million) won in the first quarter.
The auto industry took the remarks made on the same day as a declaration to give up its management of Ssangyong Motor.
"If we have a new investor (of SsangYong Motor), our equity ratio can automatically go down or the investor can buy our shares," said Vice President Anish Shah.
"We will review all loss-making projects over the next 12 months in a broad restructuring dimension, including cutting costs and enhancing the utility of capital spending amid the influence of COVID-19," he stressed.
The Mahindra Group announced late last year that President Goenka will step down from April 2, 2021, and Vice President Shah will take over the post.
Mahindra initially proposed a 230 billion won ($192 million) investment plan for Ssangyong Motor, with a goal of turning a profit three years later, but withdrew it. Instead, it has decided to provide only 40 billion won ($33 million) in emergency funds.
Some say that the withdrawal of the investment plan is a step toward the withdrawal from Ssangyong Motor. Amid rumors of the withdrawal, the government and creditors are expected to take more trouble over the issue.
