China's Bluestar leads in bid to buy South Korea's Ssangyong Motor

SEOUL, South Korea December 20,2003; The AP reported that creditors of ailing Ssangyong Motor Co. have selected China's biggest maker of industrial detergent as the primary bidder to buy a controlling stake in the South Korean carmaker, an official said Saturday.

More than 80 percent of creditors approved China National Bluestar Group Corp. as the preferred bidder, said Kang Jong-min, an official at Ssangyong's main creditor, Chohung Bank. Bluestar needed at least 75 percent approval for the right to bid first.

Creditors plan to sign a memorandum of understanding with state-run Bluestar on Monday to sell a 48.92 percent stake in Ssangyong and hope to complete the sale by March.

Ssangyong's creditors hold a majority stake in the carmaker after they agreed to forgive the company's debt in exchange for shares in 2000 and 2002. The company, specializing in sports utility vehicles and luxury sedans, has been in financial trouble since it split from the now dissolved South Korean conglomerate Daewoo Group in 1999.

Bluestar, which says it has 90 percent of China's market for industrial cleaning, has some automotive experience.

It took over 40 former military vehicle repair and assembly companies two years ago and now has five auto assembly plants. It also has joint ventures with two South Korean auto parts makers and supplies parts to a Beijing factory owned by South Korea's largest carmaker Hyundai Motor Co.

The planned sale, if concluded, would mark the first time that a Chinese company had taken a majority stake in a South Korean carmaker.

General Motors Corp. of the United States bought South Korea's bankrupt Daewoo Motor Co. last year and now has a 42 percent stake in GM Daewoo Automotive & Technology Co. Renault SA of France bought South Korea's Samsung Motors Inc. in 2000 and set up Renault Samsung.

Union workers at Ssangyong Motor have opposed the planned sale, claiming the company can survive independently.