ICBC provides ₩625 billion loan to Shanghai Automotive Industry Corporation for the Ssangyong Motor Company Acquisition Project

Project narrative

In late 2004, the Shanghai Automotive Industry Corporation (SAIC) — a Chinese state-owned auto manufacturing company — announced that they would purchase the Ssangyong Motor Company (now called KG Mobility) — a South Korea-based private auto manufacturing company. This would represent one of the first times a Chinese company participated in a overseas auto merger. Then, in 2005, the Industrial and Commercial Bank of China (ICBC) provided a ₩625 billion loan to SAIC for the Ssangyong Motor Company Acquisition Project. SAIC used the proceeds of the loan to facilitate its approximately $571 million USD acquisition of a 48.9% equity stake (59,094,188 shares at the time) in Ssangyong Motor Company. SAIC became Ssangyong's largest shareholder. In the following years, there were reportedly financial, structural, and managerial issues with the acquisition, including: difficulties breaking into the Chinese auto market, the 2008 global financial crisis, disagreements with the labor union during the global financial crisis, labor strikes, and reported interpersonal issues between new management and staff. SsangYong sought to restructure the company in 2009.