With both Indian bidders for Ssangyong — Mahindra & Mahindra and the Kolkata-based Pawan Ruia group — making it to the shortlist of
six bidders, Chinese company SAIC's 10% holding in the ailing Korean auto company could end up being a crucial factor along with its $700 million-debt and worker's activism in South Korea. However, the bidders differ sharply in their perception of the SAIC issue.
For M&M a significant Chinese minority shareholder will be a factor only if management control isn't clear cut. "If M&M bids and if it succeeds, it will need to see what kind of management control it will have at Ssangyong..so that will be a factor," said a person with direct knowledge of the matter. Rival bidder Pawan Ruia Group on the other hand sees SAIC's presence as a boon. Ruia Group chairman Pawan Ruia said: "If the Chinese want to continue, Ssangyong's China operations can get inputs from them given that Taiwan, China, Europe and Korea are its biggest markets."
Currently the Korean courts have not laid out any window for SAIC to offload its stake in Ssangyong. According to investment bankers tracking the deal, the new bidder may be offered fresh equity which will bring down the holding of all stakeholders including SAIC. To offload the balance, SAIC will need to make a fresh offer to the new owners of Ssangyong or sell shares in the open market.
