Securities code: Jiangsu Yueda Investment Co.Ltd(600805) securities abbreviation: Jiangsu Yueda Investment Co.Ltd(600805) No.: Lin 2022010 Jiangsu Yueda Investment Co.Ltd(600805) about abandonment
Announcement on participating in capital increase and related party transactions of participating companies
The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.
Important content tips:
Brief content of the transaction: Dongfeng Yueda Kia Automobile Co., Ltd. (hereinafter referred to as “Dyk company”) with 25% shares of the company plans to implement a capital increase of US $600 million. Considering the fierce competition in China’s automobile industry and the investment capital demand of the company’s new projects, the company gives up participating in the capital increase of Dyk company, and the abandoned part is invested by Jiangsu Yueda Automobile Group Co., Ltd. (hereinafter referred to as “Yueda automobile group”). Since Yueda automobile group is an affiliated legal person of the company, the company gives up participating in the capital increase of Dyk company this time, which constitutes a connected transaction.
In the past 12 months, the company and its holding subsidiaries had a total amount of related party transactions with Jiangsu Yueda Group Co., Ltd. (hereinafter referred to as “Yueda group”) and its holding subsidiaries of 48.02 million yuan.
This transaction needs to be submitted to the general meeting of shareholders for deliberation and does not constitute a major asset reorganization as stipulated in the measures for the administration of major asset reorganization of listed companies.
The monetary unit involved in this announcement is RMB unless it is specially indicated as US dollar.
1、 Overview of related party transactions
Dyk company, with 25% of the company’s shares, plans to implement a capital increase of US $600 million. Considering the fierce competition in China’s automobile industry and the company’s demand for investment funds for new projects, the company gives up participating in the capital increase of Dyk company, and the abandoned part is funded by Yueda automobile group. The fifth meeting of the 11th board of directors of the company deliberated and approved the proposal on abandoning participation in the capital increase and related party transactions of Dongfeng Yueda Kia Automobile Co., Ltd., and submitted to the general meeting of shareholders of the company to authorize the management to handle the matters related to abandoning participation in the capital increase of Dyk company.
Yueda group, the controlling shareholder of the company, holds 70% equity of Yueda automobile group, so the company gives up participating in the capital increase of Dyk company, which constitutes a connected transaction. During the deliberation of the board of directors, Zhang Naiwen, Yang Yuqing, Xu Zhaojun, Xie Zisheng, Guo Rudong, Wang Shengjie and Wang chenlan sent by related parties avoided the voting.
This transaction needs to be submitted to the general meeting of shareholders for deliberation and does not constitute a major asset reorganization as stipulated in the measures for the administration of major asset reorganization of listed companies.
2、 Basic information of related parties
Yueda automobile group, legal representative: Zhang Naiwen, registered capital: 2 billion yuan, date of establishment: June 18, 2021, registered place: 9 / F, building 11, Yueda automobile Plaza, No. 29, Xindu East Road, Yancheng Economic and Technological Development Zone, business scope: road motor vehicle production, motor vehicle inspection and testing, road cargo transportation, etc., equity structure: Yueda group holds 70%, Yancheng state owned Assets Investment Group Co., Ltd. holds 30%.
As of November 30, 2021, Yueda automobile group had total assets of 5.027 billion yuan and net assets of 2.507 billion yuan. From January to November 2021, the main business income was 230 million yuan (the data were Unaudited).
3、 Basic information of related party transactions
Dyk company, legal representative: Zhang Naiwen, registered capital: US $624 million, date of establishment: September 12, 1992, company type: limited liability company (Sino foreign joint venture), business scope: manufacturing and sales of passenger cars, etc. Before the capital increase, the equity structure of Dyk company was: Kia Co., Ltd., Yueda automobile group and the company held 50%, 25% and 25% respectively. The company hired Daxin Certified Public Accountants (special general partnership) as the audit institution of this transaction, which issued the audit report Daxin zhuanshen Zi [2022] No. 2 Huayi Brothers Media Corporation(300027) . As of September 30, 2021, the total assets of Dyk company are 1168241700 yuan and the net assets are -610650800 yuan. From January to September 2021, the main business income was 9503368200 yuan and the net profit was -1715134200 yuan.
The company employs Zhongjing Minxin (Beijing) Assets Appraisal Co., Ltd. as the appraisal institution of this transaction. The institution has issued the appraisal report of Jingxin pingbao Zi [2022] No. 045. The benchmark date of the appraisal is September 30, 2021, and the appraisal method is the market method. The value of all shareholders’ equity of the company on the benchmark date is RMB 7.7 million.
This appraisal adopts the cost method (asset-based method) and the market method. By considering various factors affecting the value of relevant assets in the evaluation of relevant assets, replacing the historical cost with the market value, and from the perspective of the cost of assets, by separately estimating the identifiable asset value of the enterprise, the evaluation result of the cost method (asset-based method) is 2871497 million yuan. Through the analysis and comparison of the financial status and operation of the appraised unit (Dyk company) and the comparable company, the necessary parameter correction is made, and the overall scale, operation capacity, growth capacity and management capacity of Dyk company are comprehensively considered, especially the evaluation of the value of vehicle manufacturing assets by public investors. The evaluation result of market method is 77.1 million yuan. Through the comparative analysis of the two, the market method can more objectively and reasonably reflect the value of all shareholders’ rights and interests of the company. Therefore, the evaluation result of the market method is taken as the final evaluation conclusion, that is, 771 million yuan.
4、 Purpose of related party transactions and its impact on Listed Companies
Dyk’s performance in 2021 continues to suffer losses, which is expected to affect the company’s net profit attributable to the parent company by about -531 million yuan. Considering the fierce competition in China’s automobile industry and the company’s demand for investment funds for new projects, the company gives up participating in the capital increase of Dyk. After evaluation, the 100% equity value of Dyk company is 771 million yuan. The capital increase scale of Dyk company is 600 million US dollars. After the capital increase, the proportion of equity held by the company in Dyk company is reduced from 25% to 4.2%. The automobile manufacturing business will no longer be an important part of the company’s business structure. In the future, the company will actively look for new investment projects to improve the company’s profitability. As of December 31, 2021, the book value of Dyk company’s long-term equity investment in the company was 0 yuan. After abandoning the participation in the capital increase, the company’s equity accounting method for Dyk company was changed from the equity method of long-term equity investment to financial assets – other equity instruments investment accounting. According to the current appraisal value, the value of financial assets was 192.75 million yuan, It is expected to increase the net profit of 2022 by about 192.75 million yuan.
5、 Review procedures to be performed for this connected transaction
(I) this transaction was deliberated and approved by the fifth meeting of the 11th board of directors of the company, and the related directors Zhang Naiwen, Yang Yuqing, Xu Zhaojun, Xie Zisheng, Guo Rudong, Wang Shengjie and Wang chenlan avoided voting during deliberation.
(II) opinions of independent directors
The independent directors of the company issued a statement of prior approval for the related party transaction and issued the following independent opinions:
1. The convening, convening and voting procedures and methods of the board of directors of the company comply with the provisions of the company law, the Listing Rules of Shanghai Stock Exchange and other relevant laws and regulations, normative documents and the articles of Association;
2. Dyk’s performance in 2021 continued to suffer losses, which is expected to affect the company’s net profit attributable to the parent company by about -531 million yuan. Considering the fierce competition in China’s automobile industry and the company’s demand for investment funds for new projects, the company gave up participating in the capital increase of Dyk. Considering that the equity ratio after abandonment has been evaluated and confirmed by audit, the related party transaction complies with the principles of openness, impartiality and fairness in terms of pricing fairness, will not damage the interests of the company and shareholders, especially minority shareholders, and will not affect the independence of the company, We agree that the company will abandon its participation in the capital increase of Dyk company and submit the proposal to the general meeting of shareholders for deliberation.
(III) opinions of the audit committee
The company intends to give up its participation in the capital increase of Dyk company. The relevant materials are complete, the transaction is fair and reasonable, and the price is fair. We agree that the company will give up its participation in the capital increase of Dyk company.
6、 Online announcement attachment
(I) statement approved by independent directors in advance;
(II) opinions of independent directors signed and confirmed by independent directors;
(III) opinions of the audit committee.
It is hereby announced.
Jiangsu Yueda Investment Co.Ltd(600805) March 1, 2022
