South Korean electric bus maker Edison Motors has created a consortium with domestic private equity firms to acquire SsangYong Motors, a troubled Korean arm of Indian auto maker Mahindra & Mahindra, its Chief Executive Officer Kang Young-kwon said Monday.

Edison, headquartered in Hamyang County, South Gyeongsang Province, signed a memorandum of understanding with its financial partners, including Korea Corporate Governance Improvement, Keystone Private Equity, as well as electric vehicle part maker Semisysco -- a Kosdaq-listed company also controlled by Kang.

Edison is among the nine companies that submitted a letter of intent in July to take part in the forthcoming auction of a majority stake in SsangYong Motors, managed by Ernst & Young Han Young.

Backed by an undisclosed amount of private equity capital, the electric bus maker is considered to be one of the strongest contenders in the crowded race.

The bidding is expected to take place soon, with Ssangyong, currently under court receivership, looking to select a preferred bidder next month.

Announcing the consortium, Edison CEO Kang emphasized his desire to take over Ssangyong. He spoke of synergy from combining Edison’s strength in hybrid and electric vehicles with SsangYong Motor’s portfolio, which currently focuses on gasoline-powered cars.

This, along with SsangYong’s capacity to mass produce cars, will allow the company to triple its annual production over the next five years and turn the lossmaking company around, he said.

“Small as it is, (Edison) is equipped with advanced technologies for motors, batteries and autonomous driving for electricity-powered vehicles,” Kang told reporters.

“Once we acquire SsangYong Motors, we can push the carmaker to further advance the (electric vehicle) technology and achieve the economies of scale.”

The only way SsangYong Motor can survive is by returning production capacity to normal -- about 300,000 vehicles each year from what is currently less than 100,000 -- by capitalizing on Edison’s ability to produce commercial electric vehicles.

The bidder also pledged to use Kang’s dividends from SsangYong for its employees’ welfare, On the other hand, he called on the company to remain conflict-free.

Kang is a majority shareholder of Energy Solutions, a de facto holding company of Edison that formerly engaged in video production for Korean TV networks. Energy Solutions acquired Edison in 2017 and has since transformed it into an electric bus manufacturer.

Edison’s financial partners also expressed a bid to make SsangYong Motor’s business more sustainable through aggressive innovation.

One of the partners, activist fund KCGI, has come under the media spotlight over the past few years for its hostile takeover bid for Hanjin KAL, which controls flag carrier Korean Air.

KCGI’s alliance with estranged Hanjin Group heiress Cho Hyun-ah and Bando Construction came to an end in April after the merger of Korean Air and Asiana Airlines was confirmed.

A top KCGI official pinned hopes on Edison’s experience in complete electric vehicle manufacturing.

“We will put our own efforts to turn SsangYong Motor into a pacemaker of Hyundai Motor Group in terms of the domestic electric vehicle business,” said Kang Sung-boo, chief executive officer of KCGI.

He also proclaimed that its investment in SsangYong will be in line with its sustainability investing, adding the private equity investor is now considering cross-border investments in companies dedicated to rare earth elements or permanent magnets.

Vying with Edison for the Ssangyong stake are Korean construction-to-shipping conglomerate Samra Midas Group and US-based HAAH Automotive Holdings, among others.

SsangYong has been under court receivership since April to embark on the court-led sales procedure as part of the company’s rehabilitation plan.

SsangYong also went into receivership in 2009, only exiting in 2011 following Mahindra & Mahindra’s acquisition.

SsangYong has sold less than 50,000 vehicles from January to July, down 15 percent on-year. The company halted car production this year in February and in April,

SsangYong logged an operating loss of 449.4 billion won ($392.9 million) in 2020, up 60 percent from the previous year. The company has been in the red for four straight years.