Korean car maker sale falls apart

Ssangyong has been on the market for five years

The future of bankrupt South Korean car maker Ssangyong Motor has been thrown into doubt, after a Chinese firm withdrew an offer to take it over.

China's Blue Star had become the preferred bidder, but failed to agree a price with Ssangyong's creditors.

Analysts said it could now be months before a new deal is put together.

The Korean firm has a market value of some $1bn (£551m), and has returned to profit under the control of creditors, but is mired in debts of $1.1bn.

Blue Star was reportedly willing to pay up to $700m for a 50% stake in Ssangyong, a sizeable premium over its notional worth.

No hurry

The collapse of the sale creates uncertainty for Ssangyong, but is not universally seen as bad news.

Many analysts saw Blue Star as a less-than-ideal partner for the car maker. Although it has some interests in the car-repair sector, its main business lines are chemicals and an extensive chain of noodle bars.

And Ssangyong's current status gives it plenty of time to find a buyer on the right terms.

This may take some time, however: the firm has been up for sale for almost five years now.

One possible option is state-run Chinese firm Shanghai Automotive Industry Corp (SAIC), which was a runner-up to Blue Star in the last round of bidding.

SAIC is now likely to be named a preferred bidder.