Warburg Pincus made key progress in selling Shenzhou car rental shares to BAIC.
In the morning of July 27, Shenzhou car rental (0699. HK) announced that ambergem Holdings Limited (hereinafter referred to as ambergem) and Jiangxi Jinggangshan BAIC Investment Management Co., Ltd. (hereinafter referred to as Jinggangshan BAIC) had signed a sale and purchase agreement on July 24. Jinggangshan BAIC purchased no less than 171 million shares (8.05% of the total shares) from ambergem, at a price of 3 The total cost is HK $529 million.
According to the announcement, the delivery plan of ambergems sale shares will occur at the same time as the delivery of shares sold by Shenzhou Youche (838006), another major shareholder of the company, and can be implemented only after a number of preconditions have been reached, including but not limited to obtaining the approval or confirmation of government authorities or regulatory authorities on ambergems sale of shares and other customary preconditions for similar transactions.
Before the sale, ambergem owned 3.13 shares of the company, accounting for about 14.75% of the companys total issued share capital, according to Shenzhou. With the completion of ambergems sale of shares and assuming no other change in the companys share capital, ambergem will own 142 million shares, accounting for about 6.70% of the total issued share capital of the company.
According to Tianyan survey, the major shareholder of BAIC Jinggangshan is BAIC Industrial Investment Co., Ltd. (40%), and the latter is a wholly-owned subsidiary of BAIC group. According to the 2019 annual report of Shenzhou car rental, ambergem is a subsidiary of Warburg Pincus, a US private equity firm.
Previously, on July 20, 2020, the Shenzhou car rental announcement said that Jinggangshan BAIC, Shenzhou Youche and ambergem had signed a takeover offer on the same day. The total number of shares to be purchased by Jinggangshan BAIC is expected to be 28.91% of the total issued share capital of the company, and the final number of shares to be acquired will depend on the actual number of shares submitted.
Among them, Shenzhou Youche plans to transfer no more than 442 million shares of Shenzhou car rental to Jinggangshan BAIC at the price of HK $3.10 per share, with the transfer consideration of up to HK $1.372 billion; ambergem intends to transfer HK $529 million for each HK $3.10 share.
Shenzhou car rental shares sale can be described as twists and turns. After four share sale plans, it finally successfully sold shares to BAIC group.
As early as April 16, Shenzhou car rental announced that ambergem and Shenzhou Youche had entered into a sale and purchase agreement on that day, and ambergem would purchase 17.11% of the shares of Shenzhou car rental in two batches.
The deal is planned to be carried out in two steps: in the first batch of share purchase agreements, ambergem purchased 98.608 million shares of Shenzhou car rental shares at HK $2.3 per share to the wholly-owned subsidiary of Shenzhou Youche on April 16, with a total price of about HK $227 million; in the second batch of share purchase agreements, ambergem conditionally purchased no more than 2.0 shares of Shenzhou car rental shares from its wholly-owned subsidiary at HK $3.4 per share 6.4 billion shares. The first batch of share purchase accounted for about 4.65% of the total share capital of Shenzhou car rental, and the second batch of share purchase accounted for 12.46% of the total share capital of the company.
However, this equity acquisition has not been successfully completed. On June 1, Shenzhou Youche announced that its major shareholder, Shenzhou Youche, had signed a non legally binding strategic cooperation agreement with Beijing Automotive Group Co., Ltd. (BAIC group) on May 31. BAIC group will purchase no more than 451 million shares from Shenzhou Youche, equivalent to about 21.26% of the total issued share capital of Shenzhou Youche.
With the signing of the contract between Shenzhou Youche and BAIC group, the transaction between Shenzhou Youche and Warburg Pincus was also announced to be terminated. Ambergem and Shenzhou Youche agree that they will not continue to purchase the second batch of shares under the sale and purchase agreement, terminate the sale and purchase agreement, and relieve Shenzhou Youche of its exclusive obligation to consider other potential transactions.
However, the acquisition of BAICs equity has failed. On July 2, SAIC Group announced that its subsidiary SAIC Hong Kong planned to acquire no more than 610 million shares of Shenzhou car rental for no more than HK $1902 million.
At that time, there was a news in the market that SAIC Group cut off BAIC groups acquisition of Shenzhou rental car with a faster quotation. In this regard, the relevant head of SAIC Group responded to the surging news, saying that the acquisition of shares of Shenzhou car rental was the result of the companys full investigation.
On July 20, SAIC Group announced that SAIC Hong Kong, a subsidiary of SAIC, had terminated its acquisition of Shenzhou car rental shares because of new circumstances affecting the conclusion of the transaction. In this regard, Chen Hong, chairman of SAIC Group, said that the reason for the termination of the acquisition was mainly related to the future operation of Shenzhou car rental. In the subsequent negotiation process of equity transfer agreement, there were new situations affecting the conclusion of the transaction. Both parties failed to reach an agreement on the delivery preconditions within the planned time. In order to protect the interests of the company, SAIC Hong Kong decided to terminate the transaction.
With the withdrawal of SAIC Group, Shenzhou car rental has been re invested in BAIC group.
Shenzhou car rental is a leading car rental enterprise in China, with industry-leading fleet size, network coverage and market share. In 2019, the annual operating revenue of Shenzhou car rental is 7.69 billion yuan, the total scale of the fleet is nearly 150000, and there are more than 1000 stores in China. With mature operation and management experience, Shenzhou is the leader of Chinas car rental market.
Lu Zhengyao, the boss behind the Shenzhou department, was Ruixing coffeeuff08 Nasdaq:LK uff09Chairman of the board of directors of three listed companies: Shenzhou rental car and Shenzhou Youche. Affected by the storm of Ruixing coffee counterfeiting, Shenzhou car rental has been trying to find a supplier, and Lu Zhengyao is also gradually withdrawing from Shenzhou.
On June 10, Shenzhou car rental announced that Lu Zhengyao had resigned from the position of chairman and non-executive director of the companys board of directors, and would no longer be a member of the companys nomination committee after resignation. As for the reasons for resignation, Shenzhou car rental explained that Lu Zhengyaos resignation took effect on June 9, 2020 in order to devote more time to the performance of duties and other businesses of Shenzhou Youche Co., Ltd.