Shanghai (ZXZC)- Wuling Motors Holdings Limited, a Hongkong-listed company engaging in automotive business, announced on Dec. 1 it had entered into a letter of intent with Guangxi Automobile, Wuling Industrial, and Wuling New Energy regarding the proposed assets restructuring and capital contribution to Wuling New Energy.

Photo credit: Wuling Motors Holdings

In accordance with the letter of intent, Guangxi Automobile, Wuling Industrial and Wuling Motors Holdings agreed to covert Wuling New Energy into a foreign-invested enterprise to engage in the new energy vehicle (NEV) business.

The state-run Guangxi Automobile attempts to use its wholly-owned subsidiary, namely, Wuling New Energy, as a platform to integrate and reorganize its NEV-related assets and businesses, which are mainly undertaken by Wuling Industrial at present.

Through signing the letter of intent, Wuling Motors Holdings intends to forge a NEV business segment from its existing commercial vehicle (CV) assembly business segment by investing in Wuling New Energy.

Notably, Wuling Industrial is jointly held by Wuling Motors Holdings and Guangxi Automobile, with the former as the majority shareholder.

Upon Wuling New Energy being converted to a foreign-invested firm, it will engage in the R&D, manufacture, and sale of NEVs in China. Besides, Wuling New Energy is planned to consolidate the assets required in the R&D, production and sale of NEVs, and will work on developing and manufacturing highly competitive all-electric and plug-in hybrid NEVs, as well as other NEV-related smart products.

Per the letter of intent, Guangxi Automobile, Wuling Motors Holdings, and Wuling Industrial will contribute about 1.6 billion yuan ($251.24 million) in non-cash assets or cash, 1 billion ($157.025 million) in cash, and 306 million ($48.05 million) in non-cash assets to Wuling New Energy.

Moreover, an employee share scheme platform will be set up with capital contribution of 80 million ($12.562 million) in cash to Wuling New Energy.

All parties' capital contribution shall be completed on or before June 29, 2022.