Mahindra & Mahindra has stated that the company will be investing a total of 80 billion Korean Won in SsangYong Motors Co (SMC). This investment will be trough subscription of preferential allotment and will be directed towards the development of new vehicles. A total of 1,45,45,455 equity shares at 5,500 Korean Won per share will be allotted totaling 80 billion Korean Won.
This investment will be towards new product growth and augmentation of competitiveness where sales, sourcing and developmental activities are concerned. The new products in the offing include a new engine and a small CUV where a portion of this investment will be directed. Mahindra had acquired 70% stake in the South Korean auto maker SsangYong Motor Co in March 2011. SsangYong Motors has set a sales target at 149,300 units during the current year as compared to 120,717 units in the previous year.
Pawan Goenka, President Automotive and Farm Equipment Sector is also Chairman SMC board. He stated that this paid in capital increase shows M&M’s commitment to support SsangYong Motors in their future endeavors so as to achieve an early turnaround.
Dr. Pawan Goenka, Chairman of the Ssangyong Motor board said, “This paid-in capital increase reflects Mahindra’s strong commitment to support Ssangyong Motor in its efforts to achieve an early turnaround.” He adds, “By expanding investment in Ssangyong and creating tangible synergy in various areas such as sales, product development and sourcing, we will continue to increase our global competitiveness.”
Lee Yoo-il, CEO of Ssangyong Motor had this to say, “With the recent decision on paid-in capital increase, we will be able to secure the necessary investment funds and at the same time, strengthen the financial soundness of the company”. He added, “Furthermore, as we carry out the investments in new models including a small CUV, our product development will also gain momentum.”