Shanghai (Gasgoo)- The National Development and Reform Commission (NDRC) released a letter of rely saying that both Chinese and foreign shareholders of Changan PSA Automobiles Co., Ltd. (CAPSA) are permitted to increase a total of RMB 3.6 billion investment at the ratio of 50 to 50.
The CAPSA should actively develop the new energy vehicle (NEV) business and manufacture the products of its self-owned PV brands in accordance with the program it had submitted before.
As early as January 12 this year, Chongqing Changan Automobile Co., Ltd (Changan Auto) announced that the company and its French partner PSA Groupe would add a total of RMB 3.6 billion investment in CAPSA, among which the Chinese investor will devote RMB 1.8 billion to the capital increase.
The capital increase is mainly to reduce CAPSA's debt-to-assets ratio and replenish new projects with capitals. Meanwhile, both shareholders intend to improve CAPSA's operation and financing by virtue of this capital increase, particularly the operational capability of DS brand.
Founded in November 2011, CAPSA had been a 50/50 joint venture between China Chang'an Automobile Group Co., Ltd. (CCAG) and PSA Groupe. In December, 2013, Changan Auto acquired 50% equities in CCAG which is equivalent to PSA Group.
According to the planning from both parties, CAPSA will launch at least one new model under DS brand in China, including D-class model. In addition, both companies chose Shenzhen as DS headquarters of China and the Asia Pacific (including Southeast Asia and India). CAPSA is responsible for the businesses in China's market and PSA Group takes charge of the operation in Asia Pacific.
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