India’s Mahindra & Mahindra is trying to offload its struggling SsangYong subsidiary, the automaker’s managing director stated.
The commercial conglomerate’s choice is a part of a wider restructuring effort to chop prices and prioritize capital expenditure amid the coronavirus pandemic. The Indian firm earlier reported a consolidated web lack of 19.55 billion rupees ($258 million), in contrast with a web revenue a yr in the past, because it booked a writedown on its funding in SsangYong and different abroad items.
“SsangYong wants a brand new investor. We’re working with the corporate to see if we are able to safe funding,” Pawan Goenka, Mahindra’s boss was cited as saying by Reuters.
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Mahindra owns a 75 % stake in SsangYong, which it rescued from near-insolvency in 2010. Nonetheless, the Indian firm has struggled to revive the South Korean SUV maker. Again in April, the parent company said it would not invest further in SsangYong.
“If a brand new investor comes on board, that robotically takes our stake down, or they might even purchase our stake,” Mahindra’s deputy managing director, Anish Shah stated. The manager added that Mahindra would overview all its loss-making companies over the subsequent 12 months.
Companies that haven’t any clear path to profitability will probably be both attached with a associate or shut down. However, Mahindra would proceed to spend money on companies that may clearly generate fairness returns of 18 % or these which might be of strategic significance, Shah stated.
So the place does Mahindra stand on the joint venture with Ford it entered final yr? Nicely, the pandemic has delayed the completion of merger formalities between the 2 corporations however, in accordance with the Indian agency, they proceed to work collectively underneath the brand new alliance.