HAAH CEO Duke Hale pivots to Korean auto import plan

“If we were successful in our acquisition of SsangYong globally, that obviously means we would have the [right to] the U.S. and Canada markets,” Hale mentioned.

Hale’s new Delaware-based company, Cardinal One Motors, will take over HAAH’s yearlong interest in the court process to discover SsangYong a brand new proprietor. Indian automaker Mahindra and Mahindra mentioned final year that it needed to promote its majority stake in Korea’s fourth-largest automaker after failing to enhance its business prospects.

With no purchaser coming ahead for money-losing SSangYong, the automaker was put beneath courtroom receivership, the Seoul Bankruptcy Court mentioned in April. HAAH has been talked about repeatedly within the Korean media as a potential savior for SsangYong however has additionally repeatedly missed courtroom deadlines to file a rescue plan.

Hale, in his first feedback on a SsangYong bid, mentioned an investor group that he’s advising intends to go after the automaker prior to the end-of-July deadline set by the Korean chapter courtroom. The Cardinal One traders will achieve this beneath the brand new authorized entity given the demise of HAAH Automotive Holdings, he mentioned.

“Cardinal One Motors has nothing to do with HAAH,” Hale mentioned in an interview Wednesday. “It is a distinctly separate entity and it’s a new entity. And that entity will be in the process of submitting a letter of intent for the acquisition of SsangYong Motors.”

Hale mentioned the SsangYong bid is probably going to contain elevating $250 million to $350 million, as well as to potential assist from Korean monetary establishments together with the Korean Development Bank. At stake in Korea, Hale mentioned, are about 4,500 jobs.

“We’re positioned in Korea, where maybe if we raise money, we get some more money that would flow into the company,” he mentioned, with out figuring out the place the extra money would come from.

“It’s going to take a significant amount of money and a significant amount of effort,” Hale mentioned. “We did a lot of due diligence on this deal. We’ve had people and outside companies evaluating SsangYong since July of last year. This is not some casual interest. We’ve been involved for 12 months now.”

Although SsangYong has been shedding money, Hale mentioned he sees nice potential for the Korean model, which is current in dozens of worldwide markets however not within the U.S. and Canada. Unlike the troublesome scenario with Chinese auto manufacturers, Korean autos do not face tariffs due to its free-trade settlement with the U.S.

“You don’t have the big tariff problem,” Hale mentioned in evaluating the prospect of Korean imports to Chinese auto imports, which carry a 27.5 % tariff. “You have great relations between Korea and the U.S. It’s a different ballgame. And Korean quality is seen by the American consumer as very good.”

SsangYong, nonetheless, has been troubled for a few years and has been shedding money, prompting Mahindra’s exit.

According to Reuters, SsangYong’s 2020 working loss widened to 449 billion gained ($401.76 million) from 282 billion gained a year earlier. Revenue fell 19 % to 3 trillion gained.

Mahindra, which owned 75 % of SsangYong as of the top of final year, purchased SsangYong when the South Korean automaker was close to chapter in 2010 however has struggled to flip it round.

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