Car rental and fleet rental company Car Inc. has entered into an agreement to buy HK$540 million (US$81 million) stakes in Hong Kong-listed electric vehicle manufacturer FDG Electric Vehicles to become its largest shareholder, according to FDG Electric Vehicles’ security filing.
The transaction reveals ambitions of Car Inc. and its chauffeured car service unit Ucar to expand in the new energy car segment.
Car Inc. will buy nine billion shares of FDG Electric Vehicles at a price of HK$0.06. It will also subscribe convertible bonds in the principal amount of HK$600 million at an initial conversion price of HK$0.06 per conversion share.
After the transaction, Car Inc. will own 22% stakes of FDG Electric Vehicles and become its largest shareholder. Car Inc. also subscribed to some convertible bonds, which when converted will give them about 37.32% shares of the company.
FDG Electric Vehicles’ core businesses include research, design, development, manufacturing and sales of pure electric vehicles, manufacturing and sales of lithium-ion batteries and cathode materials for lithium-ion batteries. It has a vehicle production base in Hangzhou, lithium-ion battery production bases in Jilin and Tianjin, and cathode materials production bases in Chongqing and Taiwan.
"Given that wave of electrification is the future of the auto industry and the Subscriber A (Car Inc.) is a leading auto mobility provider in China, leveraging the knowledge, network and assets of both companies might potentially unlock and generate synergy for both and create unparalleled opportunity for the company to expand our products into other segment and applications, thus enhancing the revenue and long-term development of the company," said FDG Electric Vehicles in a statement.
Car Inc. will buy 9 billion shares of FDG Electric Vehicles at a price of HK$0.06. It will also subscribe convertible bonds in the principal amount of HK$600 million at an initial conversion price of HK$0.06 per conversion share.
FDG Electric Vehicles has obtained a permit from China’s National Development and Reform Commission to produce pure electric vehicles in 2015.