HONG KONG — The board of directors of China Harmony New Energy Auto Holding Limited (“Harmony Auto” or the “Company”, stock code: 3836.HK) is pleased to announce that FMC Cayman (“FMC”), of which the Company indirectly owns 33.33% equity interests, had entered into a capital increase agreement and a supplemental agreement (the “Investment Agreements”) with an investment fund (the “Investment Fund”) formed by several investors in relations to FMC’s latest round of financing. According to the Investment Agreements, the Investment Fund has agreed to invest US$ 200 million in FMC to subscribe FMC’s equity interests. Based on valuation of FMC’s this round financing, equity interests in FMC owned by Harmony Auto represents significant premium to our investment cost. The Company estimates that FMC would bring no less than RMB 600 million of investment gain to the company for the year of 2017.
Nanjing Development Zone Will be Put into Production in 2019
FMC is a global smart electric cars company, aiming to build premium smart electric cars in China and shape the future for automobiles globally, in order to provide enjoyable time for people on the move. FMC has established offices in Nanjing, Beijing, Hong Kong, Munich and Silicon Valley, etc. In January of 2017, FMC had signed an agreement with Nanjing Development Zone to build a premium smart electric vehicle research & development and production base in Nanjing Development Zone, with a planned total annual production capacity of 300,000 units of smart electric cars, covering models such as SUV, sedan and MPV. The first phase of the base will commence building in 2017 and be put into production in 2019, with an annual production capacity of 150,000 units of smart electric cars. Meanwhile, FMC plans to launch show car for volume production in the fourth quarter of 2017, put into production in 2019 and seeks for IPO on an stock exchange.
Continuing Investment Gain Receivable in the Long-term
The Investment Fund which invests in FMC is formed by famous investment management companies and large groups. The parties to the Investment Agreements have confirmed that the pre-money and post-money valuations of FMC is US$ 550 million and US$ 750 million, respectively. The Company believes that it will record continuing investment gain due to FMC’s business development, follow-on financings and IPO in the future. The Company will continuously announce the latest developments of FMC to our shareholders and potential investors.