A controlling stake in SsangYong Motor has officially been put up for auction as the financially ailing company undergoes court receivership, the sale’s lead manager said Monday.

EY Hanyoung, the accounting firm in charge of the sale, released a notice of sale announcing that it was receiving letters of intent from potential buyers until July 30.

Under the sales plan, it will then run preliminary reviews of the bids from Aug. 2-27. A preferred bidder is expected to be chosen in September.

Local law firm Shin & Kim is also participating in the sale process in a consortium with EY Hanyoung.

SsangYong Motor, which is 75 percent owned by Indian automotive company Mahindra & Mahindra, has been under court receivership here since April, as it failed to obtain a rollover of 165 billion won ($147 million) worth of loans from creditors.

Over the past few months, Mahindra & Mahindra has sought to divest from the ailing South Korean carmaker, citing its global reorganization plan amid the COVID-19 pandemic.

Several companies have been suggested as potential bidders.

HAAH Automotive Holdings, a US vehicle importer, is one of them. It has had already talks with Mahindra & Mahindra, but the two sides failed to clinch a deal.

Other potential bidders include a Korean electric bus maker, Edison Motors, small electric vehicle maker K Pop Motors, and a local private equity fund, according to reports.

Ssangyong Motor has debt obligations amounting to some 700 billion won.

Kicking off the share sale procedure, SsangYong Motor asked the Seoul Bankruptcy Court to postpone the submission date for its rehabilitation plan to Sept. 1.

Earlier in the month, SsangYong Motor’s management and its labor union agreed to send half of their 4,800 employees on rotating unpaid leave for up to two years in an effort to attract a buyer and cut costs. They also agreed to a reduction in wages and to avoid labor disputes in order to stay afloat.

It is the second time SsangYong has been put under court receivership. In 2009 the automaker laid off 2,600 employees, accounting for some 36 percent of its workforce. With Mahindra’s acquisition, the company was relieved in 2011.

By Jo He-rim (herim@heraldcorp.com)