Gasgoo.com - Great Wall Motors, which halted trading late last month, has announced a new proposal to collect funds to expand its operations in the new energy vehicle sector, Shanghai Securities News reported today. According to the proposal, Great Wall aims to gather at least 16.8 billion RMB ($2.76b) in funding by selling no more than 387 million stocks via non-public means at a price of at least 43.41 RMB ($7.131) per share. Great Wall¡¯s share price when it halted trading was 42.76 RMB ($7.023).
The proposal outlines that 5.08 billion RMB ($834.39m) will be allocated towards new energy R&D projects, 4 billion RMB ($657.01m) will be used for a new energy vehicle transmission project with an annual production capacity of 500,000 units, 1.7 billion RMB ($279.22m) will be used for a new energy vehicle engine and control unit project with similar annual production quotas and 1 billion RMB ($164.25m) will be used for a new energy vehicle powertrain and battery system project with an annual production capacity of a million units. The remaining 5.02 billion RMB ($824.54m) will be allocated towards new energy vehicle R&D.
In addition to improving the company¡¯s overall competitiveness, the new operations for new energy vehicles should help it boost its profits as well. According to current market prices, the completion of the transmission and engine projects should yield 8.5 billion RMB ($1.39b) and 4.8 billion RMB ($788.41m) in total income, which would result in 1.3 billion RMB ($213.52m) and 800 million RMB ($131.41m) in net profits, respectively.
Aided by favorable government policies, the new energy vehicle industry in China is becoming an increasingly more important focal point for the whole market. Great Wall is aware of this shift and is obviously making an effort to focus more on this emerging industry by strengthening relevent R&D and production operations.