China’s state-owned Chery welcomes private firm as new controlling shareholder

Shanghai (Gasgoo)- Chery Holding and its subsidiary Chery Automobile Co.,Ltd have successfully got a same controlling shareholder, the private enterprise Qingdao Wudaokou New Energy Industrial Fund, as part of efforts for the state-owned group to achieve its strategic blueprint for 2025.

The new investor holds 30.99% and 18.5185% stake in Chery Holding and Chery Automobile respectively, closing the deal at about RMB14.45 billion in total, according to the announcements released by the Changjiang Equity Exchang.

As part of the transaction, Chery Holding's existing stake holders Huatai Huatai Asset Management and Ruichuang Investment Holding would transfer a total of 20.01% stake to Qingdao Wudaokou, according to local media reports. It means that the new equity holder will possess up to 51% in Chery Holding.

The announcement also shows that Chery Holding is the majority stakeholder in Chery Automobile with 32.4815% stake. Thus, the transaction will make Qingdao Wudaokou a major shareholder of Chery Automobile as well.

Located in Jimo District of Qingdao, Qingdao Wudaokou was founded in August 2019, only four months ahead of the deal's completion.

Local authorities of Jimo District have issued a series of policies to build an advanced manufacturing cluster for automobile industry. Reportedly, the RMB5 billion worth of earnest money Qingdao Wudaokou previously gave to Chery was offered by Jimo's local government.

Yin Tongyue, chairman of Chery Holding, said the successful capital increase is a milestone for Chery on the road to building a global best-in-class auto brand. Besides, he considered that Qingdao Wudaokou would be able to help Chery accomplish its 2025 strategy with its deep insight about automobile industry, abundant customer resources as well as rich experience in industrial investment and capital operation.

“After joining Chery, Qingdao Wudaokou will help Chery continue building a more market-driven incentive mechanism, introducing more investments, improving capital operation and speeding up its global deployment,” said Zhou Jianmin, chairman of Beijing Wudaokou Investment Fund Management Co.,Ltd, one of two shareholders of Qingdao Wudaokou.

After 11 months through November, 2019, Chery Holding had sold a total of 651,800 new vehicles, of which the volume of its self-owned brands climbed 6.8% compared with the same period in 2018.