Shanghai (Gasgoo)- Geely Automobile Holding Limited (the Company) announced on June 12 that Shanghai Maple Guorun, its indirect 99% owned subsidiary, entered into a joint venture (JV) agreement on the same day with LG Chem, the largest chemical company in Korea.
According to the agreement, both parties agreed to set up a joint venture to primarily manufacture and sell batteries for EVs.
The registered capital of the JV will be US$188,000,000 and will be contributed as to 50% (equivalent to US$94,000,000) in cash by Geely Automobile's subsidiary and as to 50% (equivalent to US$94,000,000) in cash by LG Chem.
Besides, the announcement says the JV has an initial available term of 20 years and could be further extended on the basis of a mutual agreement via the shareholders' resolution about the JV.
The JV's board of directors will contain five directors, among which two directors should be nominated by Shanghai Maple Guorun and three directors should be nominated by LG Chem.
Geely Automobile said major automakers in China are proactively developing and promoting EVs and hybrid vehicles due to the increasing public awareness over the significance of the environmental protection and the government's policy pertain to fuel saving and vehicle emission decrease. The Company has long been aware of the development potential of China's EV market. As part of efforts to expand EV business, Geely had launched its “Blue Geely Initiative” NEV strategy as early as November 2015, which demonstrates the automaker's determination in transforming into an industrial leader in NEV technologies. Thus, the JV is to be established since a reliable supply of advanced and high-performance EV batteries is necessary for the success of “Blue Geely Initiative”.
According to Geely Automobile, Shanghai Maple Guorun specializes in the R&D, production, marketing and sales of vehicles and relevant auto parts in China, while LG Chem's major businesses include the R&D, production and sales of EV batteries.
The automaker announced on June 10 that the sales volume of its first high-end all-electric sedan model “Geometry A” amounted to 1,375 units in May. Sales volume of the company's all new energy and electrified vehicles totaled 10,155 units last month.
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