Ssangyong Motor Back on Block as Agreement with Lanxing Dissolves

Seoul March 23, 2004; Lee Ji-hoon, writing for the Chosun Ilbo reported that the planned sale of Ssangyong Motor Co. to China's Lanxing Group has been called off, sources said Wednesday. An official of the creditor group said creditors of Ssangyong Motor decided to remove the preferred bidder status of the Chinese company.

As a result, plans to sell off the troubled carmaker have been sent back to the drawing board. According to creditors, Lanxing Group notified creditors Wednesday that it had no intention of accepting their demands to modify the terms and conditions of its bidding proposal.

Choi Dong-soo, president of Chohung Bank who serves as head of the creditor group of Ssangyong Motor, shakes hands with Susan Cho (third from right), vice chairman of Lanxing Group after signing a MOU on purchasing a stake in the Korean carmaker, at the Hyatt Hotel in Seoul on Dec. 22, 2003./Yonhap

Earlier, on March 16, creditors demanded Lanxing Group offer by March 30 the final bidding price of the South Korean carmaker and present a written guarantee by the Chinese government, which had been promised in the MOU.

"A decision will be made soon on whether or not we will choose another preferred negotiating partner or hold another public auction of the company," said an official of the creditor group.