Mahindra & Mahindra plans to relinquish control of the South Korean unit SsangYong Motor, the managing director of the Indian automaker, on Friday, looking to come out of harm’s way amid the coronovirus epidemic.
“SsangYong needs a new investor. Pawan Goenka told reporters that we are working with the company to see if we can secure the investment.
Mahindra had earlier reported a consolidated net loss of 19.55 billion rupees ($ 258 million), compared to net profit a year earlier, as it booked a retreaddown on its investments in SsangYong and other international entities.
Mahindra, which owns a 75% stake in SsangYong, saved the sport-utility vehicle (SUV) manufacturer from near bankruptcy in 2010, but has struggled to revive its fortunes. The company said that in April it would not invest further in SsangYong.
Mahindra’s deputy managing director, Aneesh Shah said, “If a new investor comes in, it automatically reduces our stake, or they can buy our stake.”
Shah said that as part of a comprehensive restructuring effort by the company to cut costs and prioritize capital expenditure, Mahindra would review all its loss-making businesses over the next 12 months.
Shah said that while there is no clear path to profitability, it will seek partnerships or close businesses, but which can clearly generate equity returns of 18% or that are of strategic importance, Mahindra continues to invest Will keep, Shah said.
Mahindra, which entered into a joint venture with US automaker Ford Motor last year, said the pandemic had delayed completion of merger formalities between the two companies, but they continued to work together under the new alliance Kept.