India's leading utility vehicle maker Mahindra & Mahindra has been chosen as the preferred bidder to take over Ssangyong Motor Company, Ssangyong and its creditors said on Thursday.
Ssangyong and its manager for the envisioned sale will sign a memorandum of understanding with the Indian company by the end of this month before due diligence begins in September, Ssangyong said in a press release.
The selection was made after studying bid prices, funding capabilities and willingness to develop the company, it said.
Ssangyong said it would receive deposits worth five per cent of the bidding price from the Indian company this month, without elaborating on the sum's size.
Six bidders, including an alliance of French automaker Renault SA and Japan's Nissan Motor Co, had submitted preliminary bids for the ailing automaker.
But only three, including Indian tiremaker Ruia Group and Young An Hat Co, a local headgear company that also owns bus maker Daewoo Bus Co, remained in the race until the deadline for bidding ended Tuesday.
Ssangyong was granted court protection from creditors in February 2009 after rising oil prices and slowing demand due to the global recession hit its flagship sport-utility vehicles.
Ssangyong sold 43,881 vehicles, including 26,190 overseas, in the first seven months of this year, compared to 13,091 deliveries in the same period a year earlier when workers' action over job cuts disrupted production.
Ssangyong Motor had a market value of 428.9 billion won (358.2 million dollars) on Seoul's main stock market as of Thursday. Its share price was down 6.95 per cent at 12,050 won in mid-morning trade in Seoul.
Mahindra, based in Mumbai, has been eyeing Ssangyong to gain access to new technologies for SUV production and expand its overseas presence, especially in Asia and Russia.