Chery's capital increase and share expansion officially started, and nearly 30% of its shares will be transferred

On September 17, Chery Automobile Co., Ltd. (hereinafter referred to as "Chery") and its parent company Chery Holding Group Co., Ltd. (hereinafter referred to as "Chery Holding") issued a preliminary announcement of capital increase and share expansion on the Yangtze River Equity Exchange. The two companies plan to jointly recruit the same investor and will officially issue an announcement for capital increase and share expansion before September 30. It is expected that 31.4419% of the diluted shares will be transferred, and no less than 7.911 billion and 8.332 billion yuan of funds will be raised respectively to achieve the purpose of capital increase and share expansion.

In the pre-announcement, the new equity structure of Chery Holdings has changed. The registered capital of the capital increase enterprise (Chery Holdings after the capital increase) is RMB 624,055.8251 million. Among them, Wuhu Construction Investment holds 27.4975%, Ruichuang Investment holds 25.3823%, Huatai Asset Management holds 15.6782%, and the new investor holds 31.4419%. The new investor will become the largest shareholder and will have the right to speak in Chery.

Chery Holdings and Chery Automobile Co., Ltd. plan to introduce investors through capital increase and share expansion at the same time. The investors will subscribe to Chery Holdings' newly added registered capital of RMB 1,962,151,751 and Chery Automobile Co., Ltd.'s newly added shares of RMB 1,012,931,633 in cash. The new investors need to subscribe to the newly added shares of Chery Automobile Co., Ltd. and Chery Holdings at the same time.

Chery's capital increase and share expansion is also related to "Chery Strategy 2025". According to the strategic plan, Chery will make a series of arrangements in R&D, new energy, intelligent driving and mobile travel in the future. The introduction of strategic investors at this time will not only help solve Chery's funding gap problem, but also help establish a diversified equity structure and enhance corporate competitiveness.

Yin Tongyue, Chairman of Chery Holding Group Co., Ltd. and Chery Automobile Co., Ltd., said in a letter to all Chery people that this capital increase and share expansion will gather advantageous resources and inject fresh "blood" for Chery to realize its dream, strategy and mission. After the capital increase and share expansion, Chery will establish a more effective modern corporate governance structure, be more flexible in introducing funds, talents, technology and advanced management concepts, and lay a solid foundation for the next step of entering the capital market.

It is reported that Chery Automobile's operating income in 2017 was 29.47 billion yuan, down 10.59% year-on-year; operating profit was a loss of 37.64 million yuan, and net profit was 264 million yuan. In the first quarter of this year, Chery Automobile's operating profit continued to lose 676 million yuan, and its financial pressure further worsened. In order to get rid of the burden, Chery transferred Qoros and Kaiyi Automobile last year, and now it has confirmed the increase of capital and expansion of shares.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.