Kandi Tech (KNDI) Unit Enters JV with Geely Over New Electric Vehicle Effort
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Kandi Technologies Group, Inc. (Nasdaq: KNDI) announced that on February 1, 2013, the Company's wholly owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ('Kandi Vehicles') has signed a cooperation framework agreement with Shanghai Maple Guorun Automobile Co., Ltd. ('Shanghai Maple'), a 99% owned subsidiary of Geely Automobile Holdings Ltd. (Hong Kong Stock Exchange, Stock Code: 175) ('Geely Auto'), to establish a joint venture company, named Zhejiang Kandi Electric Vehicles Investment Co, Ltd. ('JV Company') to engage in the investment, research and development, production, marketing and sales of electronic vehicles in China. Geely Auto is one of the largest and most well-known automobile manufacturers in China. In August 2010, Geely Auto acquired Volvo Car Corporation from Ford Motor Company.
Pursuant to the terms of the framework agreement, the JV Company will be owned 50% by Shanghai Maple and 50% by Kandi Vehicles. The registered capital of the JV Company will be RMB1,000,000,000, and with 50% to be contributed by each party. Upon the establishment of the JV Company, the JV Company will acquire certain assets from Kandi and Geely Auto in order for the JV Company to process the necessary properties, assets and technologies to conduct the EV business.
To enable the proposed enterprise to take place, both Kandi and Geely Auto will establish new wholly-owned subsidiaries and inject certain assets into these companies. The JV Company will then acquire all the equity interests in each of these companies. As the principal terms of the potential transaction are yet to be finalized, we will make further announcements pursuant to the requirements of the rules and regulations as and when appropriate.
The purpose for Kandi to enter into the framework agreement is to leverage on the strength, resources and expertise of both Kandi and Geely Auto in the electric vehicle segment in China. With the concerted efforts from both parties, there will be synergy for the JV Company to become an industry leader in the EV segment in the future, which will be beneficial to both Kandi and Geely Auto.
The board of directors of the JV Company will consist of four directors, of which two will be nominated by Kandi Vehicles and two will be nominated by Shanghai Maple. Mr. Shufu Li, Chairman of Geely Auto will be appointed to be the first Chairman of the JV Company and Mr. Xiaoming Hu, Chairman & CEO of Kandi will be appointed to be first General Manager. Each appointment is for a term of three years.
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Pursuant to the terms of the framework agreement, the JV Company will be owned 50% by Shanghai Maple and 50% by Kandi Vehicles. The registered capital of the JV Company will be RMB1,000,000,000, and with 50% to be contributed by each party. Upon the establishment of the JV Company, the JV Company will acquire certain assets from Kandi and Geely Auto in order for the JV Company to process the necessary properties, assets and technologies to conduct the EV business.
To enable the proposed enterprise to take place, both Kandi and Geely Auto will establish new wholly-owned subsidiaries and inject certain assets into these companies. The JV Company will then acquire all the equity interests in each of these companies. As the principal terms of the potential transaction are yet to be finalized, we will make further announcements pursuant to the requirements of the rules and regulations as and when appropriate.
The purpose for Kandi to enter into the framework agreement is to leverage on the strength, resources and expertise of both Kandi and Geely Auto in the electric vehicle segment in China. With the concerted efforts from both parties, there will be synergy for the JV Company to become an industry leader in the EV segment in the future, which will be beneficial to both Kandi and Geely Auto.
The board of directors of the JV Company will consist of four directors, of which two will be nominated by Kandi Vehicles and two will be nominated by Shanghai Maple. Mr. Shufu Li, Chairman of Geely Auto will be appointed to be the first Chairman of the JV Company and Mr. Xiaoming Hu, Chairman & CEO of Kandi will be appointed to be first General Manager. Each appointment is for a term of three years.
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