Ruia Group will decide on whether to make a bid for South Korean automaker Ssangyong in the next three days, its chairman said on Thursday.
“We are yet to take a decision on whether to make a bid for Ssangyong or not. We are evaluating, we will decide in the next three days,” Pawan K Ruia said.
The Kolkata based group along with Renault-Nissan and Mahindra & Mahindra are among the six shortlisted bidders for Ssangyong.
Meanwhile, Indian car manufacturer Mahindra & Mahindra’s (M&M) board is also getting ready to approve the company’s bid for the Korean SUV maker Ssangyong. According to close sources the company is expected to bid in the range of $300-450 million.
The bid is likely to be financed jointly through debt and internal accruals. Kotak Mahindra Bank is likely to finance the debt along with other third party bankers.
Mahindra does not want to pledge its shares or opt for an equity dilution to raise the money. “M&M’s balance sheet and debt equity ratio are strong enough to raise the money on its own along with some debt component,” said a person close to the deal. Some board members “had raised apprehensions” about the Ssangyong deal earlier and had asked for additional information.
The due diligence is being conducted by M&M for the past one month. The company’s current cash reserves stand at 5,000 crore. Its debt equity ratio is 0.3, which can go up to 0.6 or 0.7.
Last week, M&M had delayed its decision on the Ssangyong bid saying it would take a call closer to the August 10 deadline.