Mahindra to invest a reduced amount to help SsangYong stay afloat.
Amid COVID-19 crisis, Mahindra earlier this month turned down plan to pump in fresh equity in SsangYong. The Indian carmaker was planning to invest $406 million in its South Korean subsidiary.
Now, Mahindra is injecting $32 Million special funds this month to urgently address liquidity issues of SsangYong. Mahindra will first invest the amount as a loan and later convert it to equity with Indian and Korean government agencies’ foreign investment approval.
The South Korean carmaker has said that this funding is an opportunity for Mahindra to dispel suspicions of withdrawal and assure its commitment to strengthening support while maintaining ties with SsangYong.
Without raising funds, SsangYong was on a verge to bankruptcy. The South Korean carmaker has also signed a deal to sell its Busan logistics centre to secure additional liquidity.
SsangYong is currently making self-rescue efforts with anticipation of Mahindra’s investment and support from the Korea Development Bank.
Mahindra SsangYong Deal
– Mahindra earlier refused to invest $406 million in SsangYong
– The Indian carmaker will now invest reduced amount of $32 million
– This will be done to address liquidity issues
Source – TheKoreaHerald.com