이 기사는 2021년 11월 17일 08:05 thebell 에 표출된 기사입니다.

Private equity (PE) firms Korea Corporate Governance Improvement (KCGI) and Keystone PE, which will acquire the nation’s ailing SsangYong Motor alongside Edison Motors, are actively seeking to raise funds for the acquisition.

KCGI and Keystone PE have started their marketing campaigns to credit finance firms, said industry sources on Monday. It is said they are set to send an information memorandum soon. The Edison Motors-led consortium is expected to sign the final contract as early as next month.

The consortium plans to finance as much as 1.62 trillion won ($1.37 billion) for the SsangYong Motor acquisition, including a secured loan worth 700 billion won from financial institutions with SsangYong Motor's assets worth 2 trillion won as collateral and 300 billion won from a rights offering carried out by Edison Motors. The remainer is expected to be financed by the two financial investors.

KCGI and Keystone PE reportedly started their fundraising process immediately after the consortium signed the memorandum of understanding with the automaker. They have contacted credit finance firms ahead of their distribution of an information memorandum.

There are some limited partners raising doubts about the possibility of normalization of SsangYong Motor. “Although I am optimistic about the acquisition by forming a consortium with a strategic investor, it is necessary to consider risks until we can actually anticipate the business normalization,” said an official at a limited partner. “Some limited partners seem to express doubts about their possible exits because the consortium does not include a major strategic investor.”

In response, the two PE firms have reportedly decided to provide various options to lure investors, including drag-along rights and call options. “Even if the two financial investors use debt financing, they still have to secure about 200 billion won,” said the source, adding “They will likely need enough time to raise the amount mostly from credit finance firms.”

The main issue is that the Edison Motors-led consortium is the only prospective buyer of the automaker. Edison Motors currently plans to carry out another round of rights offering in addition to a secured loan from financial institutions. Restructuring industry sources widely expect the acquisition process to be completed as the consortium already paid a deposit to guarantee the purchase, with the signing of the memorandum of understanding.

The Edison Motors-led consortium kicked off in-depth due diligence on the target. It visited SsangYong Motor’s plant in Changwon, South Gyeongsang Province, in earlier this month and has been in talks with the carmaker to draw up its normalization plan.

The consortium aims to sign the final deal by the end of this year and pay the remaining balance in February 2022. The consortium will be the new owner of the debt-ridden carmaker as early as early next year if its detailed plan for SsangYong Motor's survival is approved by creditors. (Reporting by Seon-young Kim)