Mahindra & Mahindra have furthered their investment in their South Korean subsidiary, Ssangyong motors, from 72.46 per cent to a well around 74.65 per cent, through the additional subscription of shares worth Rs 316.5 crore. The news comes after the company agreed to subscribe to 1,18,90,606 equity shares of SYMC, M&M said in a regulatory filing. Mahindra has subscribed to the shares at a rate of KRW (South Korean Won) 4,205 per equity share aggregating KRW 50 billion, equivalent to around Rs 316.5 crore at current exchange rates. The transaction is expected to be completed by February 24th of this year.
In a statement regarding the refreshed equity, Mahindra and Mahindra said "Pursuant to the above, the shareholding of the company (M&M) in SYMC would increase from 72.46 per cent to 74.65 per cent”. Prior to this Mahindra had signed an agreement in 2010 to acquire, the then-troubled Ssangyong Motor Company, and completed the process of acquisition in 2011. At the time, Mahindra had purchased an even 70 per cent stake in the company for 463 million USD.
For Ssangyong and Mahindra alike the symbiotic relationship has been beneficial for both companies. While Mahindra has used their affiliation to increase their portfolio in India, with products that are largely based on Ssangyong products. This includes the likes of the 2018 Ssangyong Rexton based Alturas G4, and the upcoming XUV300 which is largely based on the Ssangyong’s Tivoli. Meanwhile, Ssangyong a once ailing SUV manufacturer has started to show signs of growth reporting consolidated revenue of KRW 3,495 billion (Rs 20,901 crore) in 2017, as compared to KRW 3,390 billion (Rs 19,273 crore) in 2015. For Ssangyong, the affiliation is even more beneficial considering that Mahindra electric is one of those few manufacturers with a fully operational electric wing that could help them through the transition to electric in the futures.