[ET Net News Agency, 26 July 2016] Geely Automobile (00175) said it agreed to sell 50%
equity interest in Kandi Electric Vehicles Group Co., Ltd. and 45% equity interest in
Ninghai Zhidou Electric Vehicles Company Limited for a total of Rmb1,346 million to
Zhejiang Geely Holding Group Company Limited.
It is expected that the Group will realise a gain on disposal of about Rmb176 million.
The net proceeds will be applied for general working capital.
The Kandi JV and the Zhidou JV are both principally engaged in the research and
development, production, marketing and sales of relatively low-end electric vehicles
(which are commonly characterised by their lower speed, charging range and technology, and
hence lower selling price) in the PRC. The Geely Automobile group plans to consolidate and
enhance its product portfolio and thus brand image by focusing on relatively higher-end
automobiles going forward. In addition, recent policies issued in the PRC in relation to
the eligibility for subsidies and tax exemptions have also been unfavourable to the
product portfolios of the Kandi JV and the Zhidou JV and have a negative effect on their
financial performance in 2016.
Geely Holding is beneficially wholly-owned by chairman and substantial shareholder Li
Shu Fu. (HL)