GAC MOTOR to transfer 49% stake in wholly-owned Hangzhou subsidiary

Shanghai (Gasgoo)- Guangzhou Automobile Group Motor Co.,Ltd. (GAC MOTOR) will transfer 49% stake in its wholly-owned subsidiary GAC MOTOR (Hangzhou) Co.,Ltd. via the Guangzhou Enterprises Mergers and Acquisitions Services, at a consideration of no fewer than 1.239 billion yuan ($194.119 million), according to an announcement of GAC Group, the parent company of GAC MOTOR.

Trumpchi GS8; photo credit: GAC MOTOR

As part of the transaction, GAC MOTOR will also transfer 246.032 million yuan ($38.553 million) worth of special vehicle models assets of GAC MOTOR (Hangzhou) Co.,Ltd.

Besides, GAC Group said its board of directors has allowed HYCAN, whose 25% equity interests are held by GAC Group, to participate in the auction of the aforesaid 49% stake in GAC MOTOR (Hangzhou) with its own funds.

In 2016, GAC MOTOR began major renovations of its assembly plant in Hangzhou, capital of Zhejiang province, in a push to expand production.

According to GAC Group's financial report, GAC MOTOR (including GAC AION)'s designed annual capacity by 2020 was 820,000 vehicles, while the capacity utilization rate only reached 42.18% last year. Thus, the transfer of the stake in Hangzhou subsidiary is regarded as a move to handle the idle capacity.

Incorporated in 2008, GAC MOTOR is founded to focus on GAC Group's self-owned passenger vehicle business. It has manufacturing plants in Guangzhou, Hangzhou, Xinjiang, and Yichang.