Sokon to wholly own Dongfeng Sokon at expense of 26.01% stake offered to Dongfeng Motor Corporation

Shanghai (Gasgoo)- Chongqing Sokon Industry Group Stock Co.,Ltd (Sokon) is ready to acquire 50% stake in Dongfeng Sokon held by Dongfeng Motor Corporation by issuing RMB4.83 billion worth of shares to Dongfeng Motor Corporation at the expense of 26.01% stake offered to the latter, according to Sokon's announcement released on November 16. 

A total of 332 million shares with the value of RMB14.54 per share will be issued to Dongfeng Motor Corporation. Once the transaction is completed, the Wuhan-based auto group will become Sokon's second largest shareholder.

Dongfeng Sokon, a 50:50 joint venture between Sokon and Dongfeng Motor Corporation, has two major car brands—Fengguang and Sokon, focusing on R&D and manufacturing of SUVs, MPVs and mini cars. Last year, the company saw its annual sales grow 6.65% year on year to around 402 thousand units. By the end of the third quarter this year, the company has delivered over 3.5 million vehicles since it was founded.

The joint venture's profit performances were impressive in recent years as well. In 2016 and 2017, it earned revenues of RMB14.742 billion and RMB19.343 billion respectively and gained net profits of RMB253 million and RMB764 million with respective tremendous year-on-year leap of 500.72% and 201.95%. Dongfeng Sokon said its unaudited financial revenues and net profit from January to September reached RMB12.436 billion and RMB584 million.