Newly-formed North American company wants to buy SsangYong - report

HAAH Automotive Holdings has failed in its plan to sell Chinese Cherys in the US, so its founder has reportedly formed a new investor group to buy up Korea's SsangYong.

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Mike Costello
Mike Costello
Comparisons Editor
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The founder and CEO of North American automotive distribution business HAAH Automotive Holdings has redoubled efforts to buy ailing Korean company SsangYong Motor.

That founder and CEO is Duke Hale, who this week spoke with Automotive News.

Mr Hale has reportedly formed a new Delaware-based company called Cardinal One Motors to take over the process of bidding on SsangYong, which was placed under court receivership by the the Seoul Bankruptcy Court in April this year.

HAAH had long been in talks to buy up SsangYong from majority owner Mahindra and Mahindra, though they’ve gotten nowhere.

The Korean bankruptcy court has placed an end-of-July deadline on a prospective deal to save the brand.

The reason why Mr Hale has reportedly formed a new investor group and company to bid on SsangYong is that HAAH is expected to file for bankruptcy liquidation after a plan to sell Chinese cars in the US failed to materialise.

MORE: SsangYong enters bankruptcy protection, business as usual in Australia

HAAH had planned to distribute and sell Chery Auto cars under different branding (Vantas and T-Go were the brand names chosen), but despite reportedly taking on investment from some dealers, this has fallen over.

Mr Hale cited frosty US-China relations.

“There’s going to be no [Vantas and T-GO] cars, there’s going to be no parts, there’s going to be no revenue,” Hale said of the bankruptcy filing according to the Automotive News report.

If Mr Hale’s new investor group makes the long-awaited successful bid for SsangYong, he said bringing its vehicles to the US and Canadian markets from Korea would likely be part of the business plan.

“Cardinal One Motors has nothing to do with HAAH,” Mr Hale said in an interview.

“It is a distinctly separate entity and it’s a new entity. And that entity will be in the process of submitting a letter of intent for the acquisition of SsangYong Motors.”

The report added the SsangYong bid is likely to involve raising up to $350 million ($480m AUD), in addition to possible help from Korean financial institutions including the Korean Development Bank. At stake in Korea are about 4500 jobs.

“We’re positioned in Korea, where maybe if we raise money, we get some more money that would flow into the company,” Mr Hale was quoted as saying by Automotive News.

“It’s going to take a significant amount of money and a significant amount of effort.

“We did a lot of due diligence on this deal. We’ve had people and outside companies evaluating SsangYong since July of last year. This is not some casual interest. We’ve been involved for 12 months now.”

Australia is an important export market for SsangYong, and home to a factory backed distributor.

MORE: SsangYong showroom page
MORE: SsangYong enters bankruptcy protection, business as usual in Australia

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Mike Costello
Mike Costello
Mike Costello is the Comparisons Editor at CarExpert.
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