AutoBeta(AutoBeta.net)12/09 Report--

On December 8, FAW Xiali announced that its controlling shareholder, China first Automobile Co., Ltd. (hereinafter referred to as FAW Xiali), will transfer its holding stake in FAW Xiali to China Railway Materials Co., Ltd. (hereinafter referred to as China Railway Materials) free of charge.

According to the announcement, all the existing assets and liabilities of FAW Xiali were placed in subsidiaries designated by the controlling shareholders of the company, and at the same time, by issuing shares to purchase assets, it purchased a controlling stake in China Railway Wusheng Science and Technology Development Co., Ltd. (hereinafter referred to as China Railway Wusheng). This transaction constitutes a major asset restructuring of the listed company.

According to Qixinbao, China Railway Wusheng Science and Technology Development Co., Ltd. was established on July 4, 2018. The top three shareholders are China Railway Materials Co., Ltd., Wuhu Changmao Investment Center (limited partnership) and Guodiao Fund. They hold 33.41%, 28.34% and 18.89% respectively, while the actual holding person is SASAC of the State Council.

On December 25 last year, China Railway Materials signed a debt-for-equity swap agreement with seven investment institutions to transfer its 66 per cent stake in China Railway Materials, totaling 7.05 billion yuan. At that time, China Railway Materials said it would strive for the restructuring and listing of China Railway Wusheng by the end of 2019.

According to FAW Xiali, the company has received notification from FAW shares, and the relevant plan has reached a preliminary intention. China Railway Materials chose FAW Xiali as the new restructuring platform, China Railway Wusheng will or "backdoor listing", and FAW Xiali will also become a "shell company".

It is worth noting that FAW Xiali issued an announcement last month to disclose the progress of the joint venture with Nanjing Boxun Motor Co., Ltd., the two sides set up a joint venture Tianjin Boxun Automobile Co., Ltd., of which FAW Xiali contributed 505 million yuan and held a 19.9% stake in the joint venture company. Boxun Automobile contributed 2.03 billion yuan and held an 80.1 stake in the joint venture company, which obtained its business license on November 20.

It is not known whether the restructuring of FAW Xiali assets will have any impact on the joint venture with Boxun Motor.

It is understood that among the six major automobile groups in China, FAW Group is the only one that has not been listed as a whole. FAW Group is the first automobile enterprise to plan the collective listing, but it has not been fulfilled for a long time because of its complex internal structure and the problem of inter-industry competition.

Data show that FAW Group has four listed companies: FAW Xiali, FAW sedan, FAW Fuwei and Qiming Information. In order to speed up the overall listing, FAW Group has accelerated its internal asset restructuring. On November 28th, FAW car issued an announcement that in order to further optimize the size of the company's share capital after the transaction and comprehensively consider the company's ability to pay cash, it is proposed to cancel 3.5 billion yuan of matching fund-raising. FAW Jiefang 100% equity held by FAW shares is purchased through major asset replacement, share issue and cash payment.

The company said that after this restructuring, its main business has been changed to FAW with strong profitability, and its profitability and core competitiveness have been improved.

On November 29, FAW Fuwei also announced that the company plans to sell 5% of its stake to Geely Yadong State-owned Capital Investment Co., Ltd. After the completion of the transaction, FAW Group is no longer the largest shareholder of FAW Fuwei, and Yadong Investment has become its largest shareholder. at the same time, the actual controller of FAW Fuwei has been changed to Jilin SASAC.

Some people in the industry said that the frequent capital operation of FAW Group in the past two years can be seen as a signal for FAW Group to start listing as a whole again.

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