Shanghai (ZXZC)- Geely Commercial Vehicles Group (GCV) is about to acquire not more than 116.3 million A shares launched by the truck manufacturer Hualing Xingma through a non-public issuance, as part of efforts to strengthen Geely’s offensive in CV area.

GCV will purchase those shares at a consideration of up to 695.474 million yuan ($104.977 million), Hualing Xingma announced on Nov. 12. The proceeds will be used to supplement working capital or repay bank loans for the truck maker, according to a local media outlet, citing a person from GCV.

“Wholly held by Zhejiang Geely Holding Group, GCV is an important part for the group’s automotive businesses, which is dedicated to developing CVs based on Geely's PV advantages and offering smart environmental-friendly logistics services. Since the foundation in 2014, GCV has advanced into a phase for rapid development,” said the person.

Hanma H7, photo credit: Hualing Xingma

Hualing Xingma said the transaction is significant to the company's development strategy, and will be conducive to improving its capital strength and perfecting capital structure.

In late July, GCV became the controlling shareholder of Hualing Xingma after it signed a stake transfer agreement with Anhui Xingma Automobile Group Co.,Ltd. (called “Xingma Group” for short) and Ma'anshan Huashen Building Materials Industry Co.,Ltd. (called “Huashen” for short), the former controlling stockholder and a wholly-owned subsidiary of Hualing Xingma.

As of the announcement date, GCV held a total of 84,680,905 shares in Hualing Xingma, which account for 15.24% of the latter's total outstanding stock.

For the first three quarters of 2020, Hualing Xingma's sales of medium-/heavy-duty trucks (including chassis) rose 12.42% year on year to 14,637 units, and the volume for special vehicles reached 11,280 units, jumping 37.8%.

GCV's Shangrao base; photo credit: GCV

Geely has kept strengthening its CV offensive. On October 27, GCV started production at its manufacturing base in Shangrao, Jiangxi province. Moreover, the company has built production facilities in Nanchong, Zibo, Yiwu, Jinzhong and Coventry.