Dongfeng Automobile: To Sell the Factory in Zhengzhou Wouldn’t Hurt Shareholders’ Interest

Yesterday, the extraordinary shareholders meeting of Dongfeng Automobile had deliberated and approved 6 proposals including selling the factory of Zhengzhou Nissan.

In the meeting, Mr. Yang, the general manager of Dongfeng Automobile, explained the reason why selling factory and it wouldn’t hurt the interest of shareholders.

In public material, the factory locates in the economic and technological development zone of Zhengzhou and the buildings, facilities, constructions and land usage will be sold. The fixed assets of the factory are 1.061 billion Yuan and finished in September 2010. The estimated value of the factory is about 1.1 billion, increasing 18.57%.

Mr. Ye, the shareholder from Guangdong, who possesses over 3 million shares, challenges this decision. He said the whole industry is expanding but Dongfeng decided to sell property as such a low price.

Mr. Yang said, to sell the factory in Zhengzhou is to increase the efficiency of assets. The output of the factory is less than 200 thousand and 80% to 90% of capacity is to manufacture Qijun & Xiaoke of Dongfeng. Only 15% is for Zhengzhou Nissan. For better management, Dongfeng decided to transfer this factory of Guangzhou Foison. For the problem of underestimating, Mr. Yang said the price is in reasonable scale and wouldn’t hurt any interest of shareholders.