SsangYong Motor's headquarters in Pyeongtaek, Gyeonggi Province / Courtesy of SsangYong Motor

Korean underwear company Ssangbangwool said Thursday it had submitted a letter of intent (LOI) to acquire SsangYong Motor in an auction scheduled later this month to find a new investor.

SsangYong's lead manager EY Hanyoung accounting firm received LOIs from interested companies for SsangYong by 3 p.m. Thursday.

"We already submitted our LOI on Tuesday and plan to join the auction on June 24," a Ssangbangwool spokeswoman said over the phone.

SsangYong plans to select the final bidder in the stalking horse bid in which the preliminary bidder suggests its price for the automaker ahead of the auction, and other bidders submit their prices in the auction.

If a company submits a price higher than the stalking horse's price, SsangYong will ask the stalking horse if it can pay the highest bidding price to buy the carmaker.

Last month, SsangYong selected a local consortium led by chemical-to-steel firm KG Group as the preliminary bidder for the company, which has been under court receivership since April 15, 2021, after its Indian parent Mahindra & Mahindra failed to attract an investor amid the COVID-19 pandemic and its worsening financial status.

Last month, four firms ― KG Group, Pavilion PE, EV parts maker EL BT and underwear company Ssangbangwool ― competed to become the preliminary bidder for SsangYong in the stalking horse bid. KG and Pavilion PE formed a consortium after submitting LOIs.

SsangYong and EY Hanyoung accepted the KG-led consortium as the preliminary bidder after the consortium beat others in terms of acquisition price, fundraising plans, and employment guarantee period.

The new auction comes two months after local electric bus maker Edison Motors failed to make a full payment of 304.8 billion won ($249 million) for the debt-laden carmaker by a March 25 deadline.

The court extended the deadline for SsangYong to find a new owner and submit a new restructuring plan by six months until Oct. 15.

SsangYong aims to select a preferred bidder at the end of June, sign a deal in early July, submit its rehabilitation plan to the court in late July, and obtain the court's approval for its restructuring plan in late August.

China-based SAIC Motor acquired a 51 percent stake in SsangYong in 2004 but relinquished its control of the carmaker in 2009 in the wake of the global financial crisis.

In 2011, Mahindra acquired a 70 percent stake in SsangYong for 523 billion won and now holds a 74.65 percent stake in the carmaker.

SsangYong's lineup consists of the Tivoli, Korando, Rexton and Rexton Sports SUVs.

The company said it will receive preorders for the all-new Torres SUV, developed under the project name J100, from Monday. (Yonhap)