Corun to buyout Geely’s capital in ChinaHybrid System Co.,Ltd

Shanghai (Gasgoo)- Chinese hybrid power system supplier Hunan Corun New Energy Co.,Ltd (Corun) announced on July 2 that the company plans to acquire 9.9% stake in ChinaHybrid System Co., Ltd (CHS Company) held by Zhejiang Geely Holding Group (Geely Holding) and 27.07% stake in CHS Company owned by Shanghai Maple Automobile Co., Ltd.(Shanghai Maple).

According to open information, Corun and Geely Holding signed an agreement on October 23, 2014 to establish a joint venture, namely, CHS Company. Under the then agreement, the joint venture would focus on the R&D, manufacturing and marketing of hybrid power system, transmission as well as battery pack (including power battery and battery power systems) and involve a total investment of around RMB 10 billion. Currently, Corun possesses 51.02% stake in the joint venture.

In February 2016, Corun disclosed that the company signed a framework agreement with Geely Holding, Changan Automobile, Kunming Yunnei Power Co., Ltd (Yunnei Power) to increase investment in CHS Company. Under the agreement, Corun and Yunnei Power will invest the cash of RMB 200 million and RMB 60 million respectively in CHS Company. Changan Automobile will inject RMB 200 million worth of investment in form of cash and technology. In addition, Geely Holding, along with Shanghai Maple, shall reserve the right to increase investment, while the value should be no more than RMB 200 million.

By the end of 2017, CHS Company owned 6 shareholders in total, namely, Yunnei Power, Chongqing Changan New Energy Automobile Co., Ltd, Corun, Changan Automobile, Geely Holding and Shanghai Maple, with paid-in capital contribution amount of RMB 55.9755 million, RMB 9.2956 million, RMB 1.031 billion, RMB 177 million, RMB 200 million and RMB 547 million respectively.

According to the paid-in capital contribution Geely Holding and Shanghai Maple offered, their shareholdings in CHS company account for 9.9% and 27.07%, which were just the equity proportion Corun plans to acquire. Additionally, Shanghai Maple is also one of Geely Holding's subsidiaries, thus, their stake transfer to Corun could be regarded as an entire withdrawal of Geely Holding's capital from CHS Company.