Two bidders said to compete for Chery’s controlling interests

Shanghai (Gasgoo)- Chery Holding restarted in September the project to increase companies' capital by seeking a new investor after failing to find a proper buyer last year. Now, two bidders have reportedly emerged.

According to local media outlets, both companies have already paid RMB5 billion worth of earnest money, which will endow them with the superiority over other rivals in the bidding process.

（Photo source: Chery Holding)

Investors who intend to acquire Chery's equity—if more than one—will be evaluated by a special group in terms of their comprehensive power, financial strength, development strategy, the ability to coordinate resources and the subscription price they will offer, according to Chery Holding's announcement posted on Changjiang Equity Exchange's website.

The two bidders were founded on this year's July 22 and August 22 respectively, according to TianYanCha, a Chinese company information search platform. The near foundation dates indicate that they might be built exclusively to strive for Chery’s controlling interests.

The three existing shareholders of Chery Holding respectively control 40.11%, 37.02% and 22.87% of equity. The new investor’s participation will make the share distribution changed to 27.68%:25.55%:15.78%:30.99%, of which the largest part will belong to the new entrant. At the same time, Chery Holding's registered capital is set to rise to RMB 6,199,599,392 from the previous RMB 4,278,406,500.

Chery Automobile, a subsidiary of Chery Holding, once again kicked off the new investor attraction project on the same day. The Wuhu-based automaker said the new investor will control 18.52% of its share, while the equity held by Chery Holding will be decreased to 32.48% from 39.86%.

The re-opened transaction is supposed to end on November 7, while will be extended by 20 workdays at most if it failed to find a proper investor at the given time.