Ssangyong Motors, the Korean has announced that the full payment of 80 billion Won (Rs 395 Crore) for the new shares has been received from its majority shareholder Mahindra & Mahindra Group and that the paid-in capital increase was successfully completed.
Ssangyong Motor decided to make a third party allotment (Preferential Offer) to Mahindra on February 14 to secure investment funds for new products. The most recent increase in the paid-in capital results from the issuance of some 14.545 million new shares (capital increase ratio of 11.9 per cent). All of the new shares will be locked up for one year, and the expected listing date is scheduled for June 7, 2013. After this, Mahindra’s shareholding ratio in Ssangyong Motor will increase from 69.63 per cent to 72.85 per cent.
Due to the paid-in capital increase being smoothly completed, Ssangyong Motor’s new product development such as the small CUV, which will be launched in 2015, will gain further momentum. Furthermore, the company’s debt ratio will decline and cash liquidity will improve, which will further strengthen the company’s financial soundness.
Also, this paid-in capital increase serves as a message to show the strong commitment of the majority shareholder Mahindra and its confidence in the turnaround of Ssangyong Motor. This will greatly boost Ssangyong Motor’s external credit worthiness.
Commenting on the successful transaction, Lee Yoo-il, CEO of Ssangyong Motor, said, “The 80 billion won paid-in capital for stock has been received, and the paid-in capital increase has been successfully completed.”
He added that “As we have secured the funds, we will vigorously proceed with our investments for new product development such as small engines and small CUV and make utmost efforts for an early turnaround of the company and improve the corporate value.”
