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In order to solve the debt and day-to-day operating problems, Chery introduces new investors through "capital increase and share expansion". At the same time, the new investor will become Chery's largest shareholder. Today, Chery Holdings and Chery Automobile officially announced that the capital increase and share expansion has been successfully completed, and Qingdao Wudaokou New Energy Automobile Industry Fund has become the new shareholder of Chery Holdings and Chery Automobile.

Before increasing capital and shares, Chery, as a state-owned enterprise, was actually the controlling shareholder of Wuhu Construction Investment Co., Ltd., which is under the State-owned assets Supervision and Administration Commission of Wuhu Municipal people's Government. After the capital increase and share expansion, Qingdao Wudaokou became the largest shareholder, directly holding 51% of Chery Holdings and Chery Automobile, realizing the mixed reform of state-owned enterprises.

According to the data, Qingdao Wudaokou, established in August 2019, is a fund body specially set up to participate in Chery's capital increase and share expansion project. it is registered in Qingdao Automobile Industry New City, Jimo District, Qingdao City, Shandong Province, and its largest shareholder is Beijing Wudaokou Investment Fund Management Co., Ltd.

According to media understanding, Qingdao Wudaokou previously paid 5 billion yuan in intention money from the Jimo District Government of Qingdao City. Public information shows that Jimo District of Qingdao is an important cornerstone investor in Qingdao Wudaokou. Qingdao Wudaokou LP also includes funds under Shandong Expressway. The total size of Wudaokou in Qingdao is 2.02 billion yuan, according to information disclosed by Shandong Expressway on the evening of November 5. The main funds come from two subordinate companies of Shandong Expressway Group Co., Ltd. Shandong Expressway Group is a state-owned enterprise in Shandong Province.

According to the announcement, Qingdao Wudaokou contributed a total of 14.34959 billion yuan in the capital increase and share expansion, with a shareholding ratio of 30.99% in Chery Holdings and 18.5185% in Chery Automobile. At the same time, in order to cooperate with the smooth implementation of this capital increase and share increase, Huatai Capital Management and Wuhu Ruichuang Investment Co., Ltd., shareholders of Chery Holdings, transferred their shares of 15.78% and 4.23% of Chery Holdings respectively, so the proportion of shares held by Qingdao Wudaokou Holdings in Chery Holdings reached 51%.

At the same time, Qingdao Wudaokou's direct shareholding in Chery is 18.5185%, plus the indirect ownership of Chery through Chery Holdings is 32.4815%, the total proportion also reaches 51%.

Finally, after the completion of the capital increase and share increase transactions, Qingdao Wudaokou's shareholdings in Chery Holdings and Chery Motor have reached 51%, and Chery Holdings and Chery Automobile will be restructured.

According to the announcement of capital increase and share expansion of Chery Automobile, the purpose of this round of fund-raising is to repay debts as well as the development of existing business, new business and day-to-day operation. As of June 30, 2019, Chery Holdings had a net profit of-156 million yuan, total assets of 90.4 billion yuan and total liabilities of 68.51 billion yuan, while Chery Automobile had a net profit of-1.374 billion yuan, total assets of 83.08 billion yuan and total liabilities of 62.294 billion yuan.

It is understood that Chery's main business has been in a state of loss for many years and barely achieved a positive net profit through government subsidies. The overall sales performance of the Chery brand in the past decade has also declined.

Yin Tongyue, chairman of Chery Holdings and Chery Automobile, said that the Qingdao Wudaokou team understands the automobile industry and has rich industry and customer resources, as well as industrial investment and capital operation experience, which can help Chery realize its 2025 strategic blueprint and empower Chery to take off.

Zhou Jianmin, chairman of Wudaokou, said, "after Qingdao Wudaokou bought a stake in Chery, it adhered to the principle of 'help does not cause chaos'. Continue to promote Chery to establish a more market-oriented incentive mechanism, increase the introduction of resources and funds, strengthen capital operation, speed up the national and global layout, and assist Chery 2025 Strategy to land."

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