KG Mobility picked as preferred bidder for Edison Motors

KG Mobility's car plant in Pyeongtaek, Gyeonggi [NEWS1]

KG Mobility is in the process of acquiring Edison Motors to diversify its car business.

A bankruptcy court in Changwon, South Gyeongsang, picked KG Mobility as a preferred bidder to acquire the electric bus maker, which has been under a court-led debt rescheduling program since January, the company said in a regulatory filing Wednesday.

Edison tried to acquire SsangYong Motor early last year but failed to make a full payment for the debt-laden carmaker, which was under court receivership, by the March 25 deadline.

The Seoul Bankruptcy Court picked KG Group as final bidder to acquire SsangYong in June that year and approved its debt payment plans in August. In October, SsangYong left from the court receivership.

In March this year, SsangYong changed its name to KG Mobility, as it seeks to transform itself into a future mobility solutions company.

SsangYong is an SUV-focused carmaker, and its lineup includes the Torres, Tivoli, Korando, Rexton and Rexton SUVs.

KG Mobility submitted a letter of intent to acquire Edison Motors last month, conducted preliminary due diligence early this month and submitted an investment proposal to the bankruptcy court in Changwon, which is in charge of the debt restructuring of Edison Motors.

The court plans to pick the final bidder for Edison Motors through a stalking horse bid, in which preliminary bidder, KG Mobility. suggests its price for Edison ahead of an auction and other bidders submit their prices in the auction.

If a bidder bids a higher price, KG Mobility has to decide on whether to take over Edison at the other bidder's price or not.

The court is expected to hold the auction next month.

"We expect KG Mobility's technology and competitive edge to result in a synergy," a spokesperson for the carmaker said. "Edison Motors will be normalized shortly after the acquisition."

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]