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Mahindra & Mahindra is gearing up for yet another investment in a foreign firm, but this time around through its Korean subsidiary. According to the Korean Times, Mahindra's Korean subsidiary SsangYong was about to sign a binding investment agreement with US based HAAH Automotive Holdings. An unnamed industry source said to the Korean media that SsangYong Motor plans to sign an investment agreement with HAAH sometime this week, at the earliest. The planned agreement would likely be a "binding offer," the source further added.
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Mahindra is planning to invest in SsangYong through its Korean subsidiary.
Interestingly, the new investment will also lead to Mahindra joining hands with the China based Cherry Automobile, the same group that work in partnership with Jaguar Land Rover (JLR) in China. HAAH Automotive Holdings is a California-based car distributor and is partly owned by China's Chery Automobile Company. The company was expected to submit its final investment proposal in the coming 7-10 days. However, Mahindra hasn't confirmed the news yet. carandbike raised a query with Mahindra about the investment but the Indian automaker has not commented on it yet.
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Mahindra was planning to reduce its stake in SsangYong.
The news comes as a surprise as recently Mahindra had announced that it will not make any further investments in SsangYong and was willing to give up its controlling stake after being unable to turn around the operations. The board moved a special resolution at its AGM to reduce its stake in SsangYong to less than 50 per cent. Mahindra currently has a shareholding of 74.65 per cent in SsangYong. The automaker had earlier proposed to infuse 230 billion won in SsangYong, but the company's board rejected the proposal in April and allowed infusing not more than 40 billion won which is just about enough to run operations for three months. As a result, SsangYong had to sell its service centres located in the Guro district in Seoul to an asset management company to raise $147 million for continuing with its operations.
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