Shanghai (Gasgoo)- FAW Car released an announcement on the night of November 27th that the company plans to inject RMB 703 million to First Automotive Finance Co., Ltd. At present, FAW Car holds 348 million shares with 21.75% proportion of the finance company. After the capital increase, FAW Car will have 480 million shares, accounting for 21.81% of First Automotive Finance. The capital will be funded by FAW Car independently.
FAW Car states that the finance company has a good profit record and would bring steady investment incomes. Financial data show that FAW Car has operating revenues of RMB 3.42billion and 3.59 billion in 2016 and the previous nine months of 2017 with respective net profits of RMB 930 million and 1.3 billion.
Registered capital of First Automotive Finance will increase to RMB 2.2 billion from the previous 1.6 billion after capital injection. Its original shareholders and new shareholders will include FAW Car, FAW Capital Holdings Ltd. and Changchun FAWAY Automobile Components Co. Ltd., which will subscribe the shares by cash. The price per share is RMB 5.33.
The announcement also states that the related party transactions sum between FAW Car and the finance company reach RMB 478 million, including deposits, loans and discount interests.
FAW Car states that the capital injection will meet the need of the finance company’s strategic development and support its future capital size, thus providing more loans and funds for FAW group members.
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