After nearly a year, the shareholders of Shanghai Dongzheng Auto Finance Co., Ltd. (hereinafter referred to as “Dongzheng finance”, 02718. HK), which is known as the “first share of auto finance”, will face major changes.
On May 19, according to the announcement issued by Saic Motor Corporation Limited(600104) the controlling shareholder of Dongzheng finance, China Zhengtong automobile service Holding Co., Ltd. (hereinafter referred to as “Zhengtong holding”), after the equity held by the controlling shareholder of Dongzheng finance was ruled and enforced by the Shanghai financial court, Saic Motor Corporation Limited(600104) as the sole bidder, acquired 1.52 billion shares, accounting for 71.04% of Dongzheng finance shares, and the auction transaction price was 1.607 billion yuan.
The announcement also said that after the completion of this auction, it needs to be approved by Bank Of China Limited(601988) Insurance Regulatory Commission and other relevant departments. There is some uncertainty in the process of this auction to acquire Dongzheng financial shares and complete the comprehensive offer. If approved, plus the previous SAIC GM Auto Finance Co., Ltd. Saic Motor Corporation Limited(600104) will own two auto finance companies.
“Bidding for the acquisition of relevant shares of Dongzheng finance is conducive to the synergy between the two sides at the business level.” Saic Motor Corporation Limited(600104) announced that Saic Motor Corporation Limited(600104) can provide extensive customer resources for Dongzheng finance and help it achieve better development in the automotive financial market; Meanwhile, the acquisition of Dongzheng finance is also conducive to the development of Saic Motor Corporation Limited(600104) auto finance business.
On April 16 this year, the Shanghai financial court issued the announcement of the Shanghai financial Court on 1.52 billion shares of Shanghai Dongzheng Auto Finance Co., Ltd. (the first auction) on the judicial auction network platform of jd.com. The auction target was 1.52 billion shares of Dongzheng finance held by the executee Zhengtong auto. The starting price is about 1.607 billion yuan, which is equivalent to 70% of the evaluation price. The starting price per share is equivalent to 1.06 yuan, which is lower than the net assets per share of 1.51 yuan.
It is reported that this part of the shares auctioned by Dongzheng finance were applied to the court for enforcement by Shanghai Banking and Insurance Regulatory Bureau. On February 9 this year, the Shanghai Banking and insurance regulatory bureau announced that because Zhengtong holdings failed to perform the administrative decision of the Shanghai regulatory bureau of the China Banking and Insurance Regulatory Commission (huyinbaojiantong [2020] No. 41) within the legal time limit, the Shanghai Banking and Insurance Regulatory Bureau applied to the Shanghai financial court for enforcement according to law. Recently, the Shanghai financial court has ruled to grant enforcement.
According to the administrative decision previously issued by Shanghai Banking and Insurance Regulatory Bureau, the reason for clearing this part of equity of Zhengtong holdings is that Dongzheng finance may have the problem of capital return for major shareholders. According to the administrative decision, since the opening of Dongzheng auto finance in March 2015, Zhengtong holdings and its affiliates have carried out related party transactions with Dongzheng auto finance in violation of regulations, seriously endangering the steady operation of Dongzheng auto finance. In addition, Zhengtong holdings established Dongzheng auto finance and carried out related party transactions in violation of regulations since it was wholesale by improper means, and the dealer’s auto loan business seriously violated the prudent operation rules.
The Shanghai Banking and Insurance Regulatory Bureau issued the above administrative decision on October 19, 2020. At that time, the Shanghai Banking and insurance regulatory bureau pointed out that Zhengtong holdings, the controlling shareholder of Dongzheng finance, was restricted by the Shanghai Banking and insurance regulatory bureau because it obtained the administrative license by improper means and carried out related party transactions in violation of regulations, and ordered to refund the equity of Dongzheng finance held by the controlling shareholder Zhengtong holdings, and the interests obtained based on the administrative license were not protected.
According to the official introduction of Zhengtong holdings, the company is a leading automobile dealer group in China, which is committed to distributing luxury and ultra luxury brand cars. Its business segments include logistics service business, lubricating oil trade business, Insurance Agency Co., Ltd.
Before Saic Motor Corporation Limited(600104) accepted the offer, joy Capital Holdings Limited (holding about 1384 million shares of Zhengtong holdings, accounting for about 51.29% of the total issued shares) and Mr. Wang MuQing, founder of Zhengtong holdings, entered into a sale and purchase agreement with the buyer Xiamen Xindeco Ltd(000701) (hereinafter referred to as ” Xiamen Xindeco Ltd(000701) “). However, in July 2021, Xiamen Xindeco Ltd(000701) withdrew from the initial transaction, and the related party Xiamen Itg Group Corp.Ltd(600755) controlling shareholder Xiamen Itg Group Corp.Ltd(600755) Holding Group Co., Ltd. entered the company, with a total consideration of HK $1.427 billion and a share price of HK $1.74 per share, and transferred 29.9% of the equity of Zhengtong holdings, thus indirectly controlling Dongzheng finance.
According to the official website of Dongzheng finance, the company is a professional licensed auto finance company, focusing on providing auto finance products and services for purchasing luxury brand cars. Dongzheng finance Dongzheng finance was established by Zhengtong holdings and Dongfeng Automobile Co.Ltd(600006) in March 2015 with a joint investment of 500 million yuan. It was listed in Hong Kong in April 2019. According to the data, the revenue of Dongzheng finance in 2021 was 316 million yuan, compared with 577 million yuan the previous year; The net profit was – 840 million yuan, compared with 54.98 million yuan in the previous year.
