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Edison Motors will seek a 700-800 billion won ($ 596-681 million) loan from the Korea Development Bank to acquire ailing SsangYong Motor company, its chief executive said on Friday.

The consortium led by the electric bus maker is expected to be chosen as the preferred bidder for debt-ridden SsangYong after a bankruptcy court ousted its serious competitor from the competition, citing doubts about its ability to finance.

At an online press conference, Edison Motors founder and CEO Kang Young-kwon said he was confident his company-led consortium will be able to channel the funds to buy SsangYong, the brand. oldest automobile in the country. The public lender KDB is the main creditor of SsangYong.

“It’s not a credit loan. This is a loan secured with SsangYong’s assets as collateral, so there is no reason for KDB to reject it, ”Kang said, adding that SsangYong Motor is valued at some 2,000 billion won. .

In a parliamentary audit session on Tuesday, KDB chairman Lee Dong-gull was cautious about the bank’s financial backing as it has yet to fully assess Edison’s business proposal Motors.

Edison Motors estimates that SsangYong Motor’s post-acquisition acquisition and relaunch program will cost between 1.48 and 1.62 trillion won.

Of this money, the 310 billion won commitment fund and operating costs of up to 530 billion won will be raised by the consortium through issuing shares or attracting outside investment, Kang said.

“Even if the KDB rejects the loan application, we can take out secured loans from other banks, albeit with higher interest rates, or even from banks outside of Korea,” he said. -he adds.

While SsangYong has focused its business on sport utility vehicles, the head of Edison Motors said he plans to make SsangYong a major player in electric vehicles.

Kang also spoke of diversifying his product portfolio to also include compact vehicles and sedans, if demand exists.

For the company to make a profit, he said the annual production volume would need to triple to some 300,000 vehicles, including 150,000 electric vehicles and 50,000 hybrid vehicles, Kang said.

“We will be making electrified versions of all existing SsangYong models by transforming Edison Motors’ unique EV systems to fit SsangYong shapes,” Kang said, explaining that this method would reduce costs and time.

Aiming to achieve a net profit of around 10,000 billion won by 2030, Kang said he plans to reopen the second manufacturing line at the SsangYong production plant in Pyeongtaek province. Gyeonggi, which is currently out of service.

The first and third lines are in service, so they can continue to produce SUVs and other passenger vehicles, Kang said.

Edison Motors’ new production plant in Gunsan, North Jeolla Province will manufacture medium and large-sized electric buses and trucks while the headquarters plant in Hamyang, South Gyeongsang Province, will manufacture will be responsible for developing and producing other mobility vehicles, such as personal air vehicles, electric yachts and ships, and electric camping buses, Kang added.

During the press conference, the head of Edison Motors also stressed that he would not fire SsangYong workers, saying it was not necessary.

“I’m not trying to acquire SsangYong to become a chaebol or anything. If SsangYong goes bankrupt, some 60,000 to 100,000 workers, including all of the partner companies, will lose their jobs, ”Kang said.

“I don’t think restructuring guarantees a return to profit or improved performance. I want to relaunch the business and create a good working environment for the employees.

On Wednesday, SsangYong said it recommended the Edison Motors consortium as the preferred bidder for the automaker to the Seoul bankruptcy court. The Edison Motors consortium includes local activist fund Korea Corporate Governance Improvement, Keystone Private Equity and electric vehicle component maker Semisysco.

By the end of the month, SsangYong and its senior manager, accounting firm EY Hanyoung, will submit a formal application to the court to approve Edison Motors as a preferred bidder, then sign a memorandum of understanding with the electric bus maker to the acquisition agreement. , according to SsangYong Motor.

Before signing the final acquisition contract, the Edison consortium will perform a two-week due diligence on SsangYong.

Seoul city’s leading electric bus supplier, Edison Motors posted revenue of 80.9 billion won with operating profit of 5.6 billion won in 2019.

By Jo He-rim ([email protected])

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