Following the signing of the non-binding term sheet, the buyer, Mahindra and SsangYong will work on concluding the deal before 28 February this year, according to Pawan Goenka, managing director of Mahindra and Mahindra.
Post the sale, Mahindra will hold less than 30% equity in the maker of Rexton and Tivoli SUVs, Goenka said in a press conference on Friday.
SsangYong has filed for court receivership with the Seoul Bankruptcy Court after failing to repay loans of about 60 billion won (Rs 408 crore) due on December 14 to lenders including JPMorgan Chase, Bank of America and BNP Paribas.
The Korean company has till 28 February to resolve the crisis as part of the Autonomous Restructuring Support (ARS) extended by the bankruptcy court, post which the company’s management will be taken over by the court.
Mahindra said that the size of impairment taken by it would be based on the nature of the deal signed. The company has a total liability of Rs 1930 crore in SsangYong – Rs 980 crore in equity and Rs 930 crore in terms of debt.
The announcement comes on a day when the company also walked away from a joint venture it was working on with the Ford Motor Company.