HAAH Automotive Holdings Inc., a US automobile distributor, has offered to invest 300 billion won ($258 million) in Ssangyong Motor Co. as part of its bid to acquire a significant stake in the South Korean automaker, according to sources in the investment banking industry.
The sources said on Sept. 20 that HAAH Automotive last week submitted a proposal to India’s Mahindra and Mahindra Ltd. that it is willing to invest the amount in cash-strapped Ssangyong if it means its stake is large enough to control the Korean maker of sport utility vehicles. Mahindra, the largest shareholder of Ssangyong with a 75% stake, is considering the offer, they said.
In the proposal, HAAH Automotive also presented some conditions for its investment, such as a deferral of Ssangyong’s debt repayment to its creditors until the automaker is fully normalized, according to the sources.
Industry watchers said HAAH Automotive may not have enough money to become a major shareholder of SsangYong with only 20 billion won in annual sales, as SsangYong needs 500 billion won to normalize its operations.
“HAAH Automotive’s proposal is not a binding offer. Also, it is known that there’s a difference between Mahindra and HAAH over the size of the stake up for sale,” said a source close to the matter.
Based in Irvine, HAAH Automotive is an auto startup established in 2014 by Duke Hale, a former vice president of Volvo, Mazda, Jaguar and Land Rover. HAAH is reportedly planning to distribute Chinese vehicles in the North American market.
Write to Jun Ho Cha at
chacha@hankyung.comEdited by In-Soo Nam