WUHAN, China, April 22, 2016 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its main subsidiary, Hubei Henglong Automotive System Group Co., Ltd. ("Hubei Henglong"), has sold its 51% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd. ("Fujian Qiaolong") to Longyan Huanyu Emergency Equipment Technology Co., Ltd. ("Longyan Huanyu").
Terms of the transaction include a cash payment of RMB 20 million and the repayment of a RMB 34 million loan by Fujian Qiaolong to CAAS. Longyan Huanyu has pledged its 51% equity interest in Fujian Qiaolong as security for the repayment of the loan obligation.
In May 2014, CAAS entered into an agreement to acquire a 51.0% equity control position in Fujian Qiaolong for RMB 18.5 million (equivalent to approximately $3.0 million) in cash, along with a loan of RMB 30.0 million ($4.8 million) to Fujian Qiaolong at an annual interest rate of 8.5%.
Mr. Hanlin Chen, Chairman of China Automotive Systems, stated, "We believe we can better use these resources to accomplish our core strategic goals and to augment our ability to capitalize on our growth opportunities."
About China Automotive Systems, Inc.
Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 5.0 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beijing Henglong Automotive System Co., Ltd. (for Beiqi Foton Motor Co., Ltd.) and Chery Automobile Co., Ltd. in China, and Chrysler Group LLC in North America. For more information, please visit: http://www.caasauto.com.
This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. These forward-looking statements include statements regarding the qualitative and quantitative effects of the accounting errors, the periods involved, the nature of the Company's review and any anticipated conclusions of the Company or its management and other statements that are not historical facts. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Form 10-K annual report filed with the Securities and Exchange Commission on March 30, 2016, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
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Chief Financial Officer
China Automotive Systems, Inc.
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SOURCE China Automotive Systems, Inc.