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Enhances Financing Capacity, Expands Scale of Operation
Achieves Synergy Effect, Speeds up Transformation into a Higher Tier and
Becomes the Leading Integrated Service Provider of Luxury Automobiles in China |
HONG KONG, May 17, 2015 - (ACN Newswire) - One of the largest luxury automobile dealership groups in affluent coastal regions of Eastern China, China Rundong Auto Group Limited ("Rundong Auto" or the "Company", together with its subsidiaries, the "Group", stock code: 1365.HK), is pleased to announce the introduction of Greenland Financial Overseas Investment Group Co., Ltd. ("the Investor"), a wholly-owned subsidiary of the leading real estate developer - Greenland Holding Group Company Limited ("Greenland") in China, as the controlling shareholder of the Company.
Rundong Auto intends to allot and issue a total of 536,270,747 Subscription Shares, comprising at least 251,942,800 Ordinary Subscription Shares and up to 284,327,947 Non-voting Subscription Shares at a Subscription Price of HK$2.89 per Subscription Share or an aggregate Subscription Price of HK$1,549,822,459. Upon completion, the Investor will be interested in up to 283,942,800 Ordinary Shares, representing, as a result of the Allocation Adjustment, 30.0% of the issued Ordinary Shares as enlarged by the Ordinary Subscription Shares and become a controlling shareholder of the Company.
Rundong Auto's introduction of controlling shareholder implies the cross-industry cooperation with Greenland, which leads to customer resource sharing and creates mutual benefits in terms of sales and marketing. The Group will be able to expand its automobile sales and services in the larger customer base of Greenland while Greenland can introduce the Group's luxury automobile customers to its real estate, consumer finance and big consumption markets. Greenland and the Group will also jointly develop a new area of business in the internet arena and community services, such as the provision of electric vehicle charging piles in commercial buildings and local communities, speedy automobile repair, maintenance and insurance in the local communities. The Group and Greenland also envisage cooperation in the financial sector, especially in the areas of automobile financing and car leasing financial services.
Mr. YANG Peng, Chairman, Executive Director and President of China Rundong Auto Group Limited, said: "Introduction of Greenland Financial Overseas Investment Group Co., Ltd., the wholly-owned subsidiary of Greenland, as controlling shareholder represents Greenland's recognition and confidence in the Group's development strategy. Rundong Auto will not only be able to enhance financing capacity in the short term, but also optimize debt structure and improve risk-resisting ability. In the long term, the Company will be able to enjoy the strong support from Greenland, including but not limited to credit guarantees, strategic alignment and sharing of customer base, and introduce strategic upstream and downstream partners to the Group, creating a spacious room for development. Meanwhile, with the advantages and resources that Greenland will bring to the Group, the Group will achieve greater scale of development from applying strategic synergy of resources, enabling the Group to develop innovative business while expanding and upgrading current business, and accelerate the goal of the Company to become China's leading integrated service provider of luxury automobiles."
The cooperation between Greenland and Rundong Auto will create mutual benefits to each other: Greenland will fully support Rundong Auto's development, provide or facilitate low-cost financing arrangements, guarantees, loans, line of credits or other financing measures to strengthen its credit and broaden its financing channels, and treat the Company as the only listed company under Greenland for the operation of automobile dealership business and provision of related after-sales and value-added service. Meanwhile, Greenland will benefit from introducing Rundong Auto's luxury automobile customers to its real estate, consumer finance and big consumption markets. Both parties will cooperate in business-related sectors and generate industry synergy effects; they also envisage cooperation in the financial sector, especially in the areas of automobile financing and car leasing financial services.
With the advantages and resources benefited from Greenland, Rundong Auto will be able to develop new energy vehicle, electric car and hybrid automobile markets, as to cater the continuously changing market demand. Besides, the Company will also promote its automobile financing and financial leasing business, penetrate in the internet vehicle sales market and develop cross-sector cooperation by establishing community vehicle service platforms through the internet, in order to further enhance its marketing competitiveness and profitability.
In addition, the estimated net proceeds from the issue of the Subscription Shares, are intended to be used as follows: approximately 60% for financing new projects of pursuing potential operations in related new business segments, such that Rundong Auto would expand its operational scale while achieving transformation into a higher tier in the industry; approximately 30% for improving the capital structure of the Group; and approximately 10% for working capital of the Group and other general corporate purposes.
Mr. YANG Peng concluded: "We have been committed to strengthening our core competitiveness with the goal of becoming the top-tier automobile dealership and related after-sales service provider in China. The introduction of controlling shareholder will largely accelerate the Group's implementation of strategic business planning and provide a strong support for our robust cross-industry development. The cross-industry cooperation between Rundong Auto and Greenland will definitely become a new model and development trend in the automobile dealership and service industries. With the resources and human networks Greenland brings to the Group, they will continue to expand and improve Company's business in the China market, creating new platforms for the future development of Rundong Auto."
Topic: Press release summary
Source: China Greenland Rundong Auto Group Limited
Sectors: Daily Finance
https://www.acnnewswire.com
From the Asia Corporate News Network
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