FAW Xiali: plans to sold 15% shares of Tianjin FAW Toyota Motors to shareholders

Gasgoo (Shanghai, August 22)—On the night of August 21th, FAW Xiali released an Announcement of Suspension of Trading in relation to material asset restructuring by the Board, in which the company plans to sell 15% shares of Tianjin FAW Toyota Motors (TFTM) to its controlling shareholder, FAW Group. It’s expected that a total of RMB 2.5b will be obtained and increase FAW Xiali’s current profit. FAW Xiali still holds 15% shares of TFTM after the asset transfer. The trade is expected to form a material asset restructuring, and the company stock will face a suspension of trading from August 22th.

Considering the company’s current production and sales scale, along with its difficulties in operation, FAW Xiali plans to raise needed capital by asset restructuring, to focus on the development of self-independent brand vehicles, launch new products in accordance with the “13th-five” plan, put an end to the passive state of operation, and finally achieve long-term and steady developments.

Announcement states that because product upgrading and structural adjustments lag behind auto market’s rapid change, the company faces a great drop in production and sales scale in economic car market, bringing operation loss. The company has adopted active measures to conduct R&D and upgrading of new products. It launched D60 at the end of 2014, promoting product quality, price and brand image greatly. The company will also produce new A70 this month. Besides, SUVs, hatchbacks, wagons, electric vehicles and other new models are in preparation. It’s expected that the product upgrading and structural adjustments will be basically completed in 2018, to increase product competitive strengths greatly.