BAIC Motor’s subsidiary to subscribe for 6.25% A shares newly issued by BAIC BluePark

Shanghai (Gasgoo)- BAIC Guangzhou, a wholly-owned subsidiary of the Hong Kong-listed BAIC Motor, agreed on August 3 to subscribe for not less than 6.25% of the total new A shares to be issued by BAIC BluePark, an A-share listed subsidiary of BAIC Group (a controlling shareholder of BAIC Motor), at a subscription price of up to 343.8753 million yuan ($49,246,038), according to BAIC Motor's announcement.

On the same day, each of BAIC Group and its subsidiary, Bohai Automotive, entered into similar agreements with BAIC BluePark, for the subscription of not less than 29.57% and 3.01% of the whole new A shares to be issued by BAIC BluePark at a maximum subscription amount of 1,626.5805 million yuan ($232,940,967) and 165.7231 million yuan ($23,733,040) respectively.

As of the date of the announcement, BAIC Guangzhou, BAIC Group and Bohai Automotive respectively hold 6.25%, 29.57% and 3.01% equity interests in BAIC BluePark. If the subscription completes, the minimum stake percentage of BAIC Guangzhou in BAIC BluePark will remain at 6.25% and its maximum percentage will not exceed 7.32%.

(BEIJING U5, photo source: BAIC Motor)

As the sole controlling shareholder of BAIC Motor, BAIC Group holds 42.63% of total share capital issued by the Hong Kong-listed automaker. Therefore, BAIC Group and its subsidiaries—BAIC BluePark and Bohai Automotive—are all connected persons of BAIC Motor, and the aforesaid joint subscription for new A shares proposed to be issued by BAIC BluePark constitutes a connected transaction of BAIC Motor.

BAIC BluePark, whose A shares are listed in the Shanghai Stock Exchange, has major businesses including R&D, design and sales of automobiles, auto parts, mechanical equipment, electrical equipment and parts processing equipment, automobile decoration, and so on.

BAIC BluePark's wholly-owned subsidiary, BAIC BJEV, is China's first enterprise obtaining the qualification for NEV production. BAIC Motor noted that it also has strategic cooperation with BAIC BluePark in product R&D, production, marketing and other businesses. Through acquiring the A shares issued by BAIC BluePark, BAIC Motor can prevent the dilution of its shareholding in BAIC BluePark at a reasonable cost, and step up its strategic engagement in the NEV business.

The proceeds from the A share issuance of BAIC BluePark are set to be invested in the development of the ARCFOX-branded high-end vehicle models and network construction, the development of battery-swapping business systems, the improvement in 5G intelligent networking systems and other project construction, and the replenishment of working capital, according to BAIC Motor's announcement.