GAC "spends money" listing will be joint venture Mitsubishi

Accompanied by the delisting of Guangzhou Automobile Changfeng (600991.SH) and Guangzhou Automobile Group's return to A-shares, this reorganization drama around Mitsubishi finally settled.

Recently, Guangqi Group Executive Director Lu Wei said in an interview with this reporter that after the completion of the overall listing of A shares, GAC Group will establish a joint venture with GAC Changfeng-related assets and Mitsubishi, and GAC and Mitsubishi will hold 50 joint venture companies respectively. % of equity.

After nearly 4 years of capital operation, the three major shareholders of GAC Changfeng had a very different fortune: Mitsubishi Motors, the joint venture subsidiary that established the 5:5 equity, finally saw the light; Guangqi retained Fiat and Mitsubishi for cooperation. Partner; Changfeng Group, the original shareholder of GAC Changfeng, who had been obsessed with building its own brand, opted for 1.448 billion yuan in equity transfer, and withdrew from GAC Changfeng.

Although on the surface, Guangzhou Automobile Group introduced new partners, Mitsubishi has, to a certain extent, reversed its downward trend in investment losses in China, and Hunan Province, which plays an important role in binding, has increased its strength in the automotive industry, but in this Behind the game between the autonomous development of the domestic auto industry and the expansion of foreign capital, the gains and losses of all parties are far more than that.

Guangzhou Automobile: Costing money for listing As the most important promoter in this capital drama, GAC Group's gains are obvious: It has thus won two joint venture projects between Fiat and Mitsubishi. However, in stark contrast to other car companies listed on the market, GAC Group's overall listing has not only failed to provide financing, but also paid a pre-paid cost of 2.448 billion yuan.

The marriage between GAC Group and Changfeng Group was settled in May 2009. GAC Group spent RMB 1 billion to acquire 29% of Changfeng Auto from Changfeng Group. GAC Group thus replaced Changfeng Group as the largest shareholder of the listed company. Changfeng Automobile was subsequently renamed GAC Changfeng.

After entering the main Changfeng, GAC immediately signed a joint venture agreement with Fiat, an Italian brand that had originally given an olive branch to Changfeng Automobile. It was agreed that the two parties would jointly produce Fiat cars and engines, and the future GAC Auto Engines will use Fiat technology, and GAC will enjoy knowledge. property.

“Guangzhou Automobile Co., Ltd. purchased equity from Changfeng Motor at the time and not only realized a joint venture with Fiat, but also expanded its own site. GAC and Fiat’s joint venture factory was built in the Changsha Xingsha Industrial Development Zone, which has allowed Guangnan Automobile, which has been entrenched in South China This achieved an expansion from south to north and deep into the hinterland," said Liu Feng, an analyst at Southwest Securities.

Since then, GAC Group and Changfeng Group jointly provided short-term loans of RMB 330 million to GAC Changfeng and set out to carry out a series of rectification work for the company. However, in this series of actions, Mitsubishi Motors, the third largest shareholder of GAC Changfeng, never had any involvement. At that time, the market speculated that Mitsubishi would withdraw from GAC Changfeng, and Mitsubishi continued to release that it was looking for new partners.

Until March 2011, GAC Changfeng released a news that GAC will absorb Changhua Automobile Changfeng, and then with Mitsubishi to build a 50%: 50% joint venture subsidiary, it shows the deep cooperation between Guangzhou Automobile and Mitsubishi, Changfeng out of the pattern. The cooperation between Guangzhou Automobile and Mitsubishi is the second joint venture project of Guangzhou Automobile Group with GAC Changfeng's platform.

Due to the agreement reached between GAC Group and Changfeng Group and Mitsubishi Motors, Changfeng Group and Mitsubishi Motors, which are the second and third largest shareholders of GAC Changfeng, will not participate in the conversion of GAC Group, but will instead use RMB 12.65 per share. The price exercises cash options to Guangzhou Automobile. Since the two companies respectively hold 114 million shares and 75.979 million shares of GAC Changfeng, GAC also paid Changzhi Group and Mitsubishi Motor respectively a consideration of 1.448 billion yuan and 961 million yuan.

However, Lu Wei told reporters that due to the establishment of a joint venture in the future, Mitsubishi Motors would need to pay GAC Group to purchase the relevant assets of GAC Changfeng. As a result, GAC's cash options arrangement for Mitsubishi did not cause any real financial pressure on GAC.

However, even if GAC's obligation to pay to Mitsubishi was excluded and GAC Group purchased RMB 1 billion from Guangqi Changfeng’s shares, GAC Group’s advancement costs for the entire listing remained as high as RMB 2.448 billion.

Perhaps the reorganization of the gains and losses for the GAC Group will only become clear after years. However, it is worth noting that the former chairman of GAC Group Zhang Fang has stated that GAC's “Twelfth Five-Year Plan” aims to achieve a production and sales volume of 3 million vehicles, while the GAC Mitsubishi project will not be the final for GAC foreign joint ventures and restructuring. an item. The implication is that the reorganization and expansion of GAC Group is still continuing.

Mitsubishi: Watching Mitsubishi Mitsubishi, who seems to have been in a passive state during the entire reorganization, is actually the biggest motivator of the reorganization.

As early as the 1980s, Mitsubishi Motors, which had entered the Chinese market, failed to share the feast of the Chinese auto market blowout because of “unfortunate people”.

Since multinational car companies operating in China are required to be subject to the "one-on-two" policy (that is, they can only be joint ventures with two Chinese auto companies at the same time), Mitsubishi Motors has identified two partners South East Automotive and Guangzhou Automobile Changfeng in China.

However, unlike Toyota, Honda, Volkswagen and other multinational giants commonly used with China's 50% stake in each of the different modes of cooperation, Mitsubishi Motors held shares of South East Motor and GAC Changfeng reached only 28.5% and 14.59%, low shareholding ratio This not only limits Mitsubishi Motors’ right to speak in cooperation, but also makes it miss the huge profits from blowouts in the Chinese auto market in 2009 and 2010.

The Mitsubishi executives have publicly stated since the beginning of 2010 that Mitsubishi Motors can no longer miss the next wave of the Chinese auto market. Mitsubishi intends to clear its willingness to cooperate with GAC Changfeng or Southeast Motor, and to find new partners. Since then, Mitsubishi Motors has extended its joint venture olive branch to Foton Motors and Dongan Automobile, but it has failed to reach an agreement.

In stark contrast to Mitsubishi’s desire to withdraw and leave, GAC Group is actively trying to integrate Mitsubishi into its partners. As Mitsubishi's SUV models are good, they have increased by 101.27% and 20.19% year-on-year in the domestic auto market in 2010 and 2011, far higher than the average growth rate of the passenger vehicle market in the same period. If it can achieve cooperation with Mitsubishi, Guangzhou Automobile will undoubtedly find a new profit growth point for itself.

According to an insider of the GAC Group, the insider disclosed to GAC Changfeng that the Guangzhou Automobile Group could not establish a 50% 50% joint venture with Mitsubishi, and GAC Group had proposed to the Mitsubishi Group that the two parties had a controlling stake in GAC Changfeng. However, since Mitsubishi Motors insisted on holding 50% of the shares of the joint venture company, GAC has proposed the plan to withdraw GAC Changfeng.

“Currently, GAC and Mitsubishi have established a 50% 50% stake in the joint venture company. The matter has already been approved by the National Development and Reform Commission. After the Guangzhou Automobile Group has returned to A-shares, the joint venture will soon start.” Lu Hao said.

Mitsubishi Motors, which had been entwined for a 50% controlling stake, has finally resorted to a series of capital movements to keep the moon open.

Changfeng: Helplessly Outgoing It seems to the observer that Changfeng is somewhat disheartened. After all, its own brand Changfeng Cheetah, which was built by itself, was once a halo of the Chinese auto industry. At the moment, Changfeng Group will withdraw RMB 1.448 billion from GAC Changfeng, and it will be possible to join hands with GAC in operating the Changfeng Cheetah brand again. There is no answer yet.

At the GAC Group’s shareholder meeting for the conversion of GAC Changfeng, Changfeng Group Chairman Li Jianxin expressed with emotion that if it were only the first major shareholder of Changfeng Group, our choice would be “opposition”. On the one hand, Changfeng Cheetah will lose the financing platform of listed companies after the absorption and conversion scheme is passed. On the other hand, Xingsha Plant will also become the base of Guangqi Mitsubishi.

The frustration is that Changfeng Group’s other status is a large state-owned enterprise in Hunan Province. Therefore, it can only be ordered and passively “agreed”.

But on the other side of the coin, Changfeng Group may have chosen the best exit time.

Analyst Zhang Xin of Guotai Junan believes that the future market performance of GAC Changfeng may not be able to do better with the outlook of the domestic auto market and the judgment of GAC Changfeng's own products. Changfeng chose to transfer the equity of GAC Changfeng at a relatively high price during the performance ceiling. This business is quite cost-effective.

It is worth noting that Japanese auto companies such as Toyota, Honda, Mitsubishi, and Hino occupy the mainstream seat among GAC's partners. Against the background of the earthquake in Japan and the overall decline of the Chinese auto market, GAC announced that the actual profit for 2011 is estimated to be only 80% to 90% of what is expected. Changfeng Group's exit at this time is not a bad luck.

It is worth mentioning that before the departure of Changfeng Locomotive, it seems that it also "broke" GAC.

In March 2011, GAC Group divested its plan to absorb cash options for convertibles through the program of absorbing and converting GAC Changfeng, which was designated as GAC Group and SINOMACH. However, on June 10, 2011, GAC suddenly received notice from Changfeng Group that Changfeng Group decided to exercise its cash option on all 114469321 shares held by GAC Changfeng, instead of participating in the conversion of GAC Group.

Facing the need to pay 1.448 billion yuan to Changfeng Group, GAC Group had to amend the plan to expand the cash-supplying party in the absorption and exchange to Guangdong Finance Holdings, Guangzhou Automobile Group and International Group. Guangdong Finance Holdings, which was brought up by Guangqi Group as a fire-fighting team, is a state-owned enterprise of Guangdong Province, which is also part of GAC Group.

In the four-year reform marathon promoted by the Hunan government, the other force that cannot be ignored is the Hunan provincial government.

According to sources close to the Changfeng Group, the Hunan Provincial Government has played an important role in coordination and cooperation in the delisting of Guangzhou Automobile Changfeng, the joint venture between GAC and Fiat, and the joint venture between GAC and Mitsubishi.

The gains and losses of the Hunan Provincial Government in the game of interests of all parties also seem to be particularly tempting. It is quite unique in its guiding investment attitude that it does not seek all, but seeks its own place.

Obviously, after Guangqi Changfeng delisted, the Hunan provincial government not only lost the shell resource of a local listed company, but also lost Changfeng Automobile brand.

At the same time, however, Hunan has also obtained a bargaining chip to become a more weighted automobile industry base. After Changfeng Group withdraws from GAC Changfeng, it will focus on the development of GAC Group's automobile parts and related parts and components business in Hunan; and GAC Fiat The spare parts park has also started to break ground in the Changsha Development Zone; in conjunction with the automobile industry park in the Xiangtan area, the automobile production capacity in the Chang-Zhu-Tan area will be further strengthened.