Economic Observer Network reporter Gao Feichang On November 29, GAC Group (601238.SH) issued an announcement stating that it will reorganize its wholly-owned subsidiary, GAC E’an, and stated that “this internal asset reorganization is for GAC E’an to promote mixed ownership reform and introduce strategic investment. The basic work of the author”.
GAC’s restructuring plan mainly includes: GAC Group increased its capital to GAC E’an with 7.407 billion yuan in cash, and GAC Passenger Cars increased its capital in GAC E’an with 3.557 billion yuan in production equipment and other physical assets. As a condition of the transaction, GAC Aian will purchase intangible assets and fixed assets related to the pure electric new energy field of GAC Research Institute and GAC Passenger Vehicles by paying 4.975 billion yuan in cash and assuming liabilities. GAC E’an will increase its registered capital with part of its capital reserve. After the reorganization is completed, the registered capital of GAC E’an will increase to 6 billion yuan.
During the recent Guangzhou Auto Show, GAC Aian General Manager Gu Huinan said in an interview with the media including Economic Observer: “To promote the mixed reform, GAC Aian and GAC Research Institute have carried out personnel and R&D business reorganization. At present, the R&D team of Guangzhou Automobile Research Institute has nearly 600 people, and some of the patented technologies and R&D centers have been transferred to GAC Aian.”
GAC Group pointed out that this is an internal reorganization. All parties involved in the transaction are wholly-owned subsidiaries and branches of the company. Before and after the transaction, GAC Group held 100% equity of GAC Aian, so it has no significant impact on the current company’s operations.
According to the data, GAC AION New Energy Automobile Co., Ltd. was established on July 28, 2017. It first existed in the form of GAC New Energy Automobile Co., Ltd., and AION AION was the name of a series of products launched by the company at that time. In November 2020, in order to better focus on the development of new energy sources, GAC Aeon was separated into a brand, focusing on mid-to-high-end pure electric vehicles. At present, within the GAC Group, GAC Aian and GAC Trumpchi are two independent brands in parallel.
Since its establishment, GAC Aian has developed rapidly. It currently has a plant with a production capacity of 100,000 vehicles and plans to expand to 200,000 vehicles next year. In terms of products, it has launched four pure electric vehicles: AION S, AION LX, AION V, and AION Y. The sales volume from January to October in 2019, 2020 and 2021 were 42,003 units, 60,033 units and 90,826 units respectively.
The purpose of this asset restructuring of GAC Aian is very clear. GAC Group has “packaged” the main business and assets of its own new energy sector into GAC Aian, making GAC Aian the main platform for GAC Group’s pure electric business. The strategy focuses on improving the overall competitiveness, and in the long term, it will also enhance the competitiveness and profitability of listed companies.
“In the follow-up, GAC Aon will further promote employee shareholding and the introduction of strategic investors. In the future, GAC Aon will make full use of the capital market, actively seek an appropriate time to go public, and build an independent capital market platform and market-based incentive mechanism.” Mentioned in the announcement.
As a matter of fact, regarding the asset restructuring, mixed reform, and the introduction of strategic investment for GAC Aon, as early as last year when GAC Aon announced its brand independence, GAC Group and GAC Aon have released information on many occasions.
During the Guangzhou International Auto Show, General Manager Feng Xingya of Guangzhou Automobile Group said in an interview with the media that the draft of the employee shareholding plan has been completed internally and is awaiting approval. “Aian’s spin-off and mixed-use reform are important pillars for the future development of GAC Group. We are now selling more than 2 million vehicles, and the entire market is valued at more than 100 billion yuan, which is less than 200 billion. Coupled with such a good mechanism, the valuation of Aian may be equivalent to the valuation of the current new power. We hope that Aian can perform well.” Feng Xingya said.
Regarding the situation of strategic investors, Feng Xingya previously told a reporter from Economic Observation Network that many investors are interested in Aian, but it is not yet time to announce it. Another person from the new energy industry revealed to reporters: “GAC Aeon already has interested investors, and the first round of financing is likely to be announced within this year.”
From the perspective of the entire industry, it is a common practice for major auto companies to separate their new energy businesses, build asset-light companies, strengthen technology labels, and promote IPOs. Take Changan Automobile as an example. In 2018, Changan New Energy Technology Co., Ltd. was established to realize the independence of new energy business. In 2019, the company introduced strategic investors to realize mixed reform. Changan’s high-end brand Avita Technology also announced the introduction of Ningde era and other war investments on November 5 this year. Both Changan New Energy and Avita Technology have announced plans to go public in the future.
In addition, Geely’s Jikrypton, Dongfeng’s Lantu, SAIC’s Feifan Automobile, and Jie Hydrogen Technology have also announced independent operations this year. The introduction of strategic investment and IPO are also the established goals of these companies.Return to Sohu to see more
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