CHINESE developer Greenland Holding Group will pay HK$1.5bn (£123m) for a controlling stake in luxury auto dealer China Rundong Auto Group.
Rundong Auto, backed by US private equity firm KKR & Co, said it will sell a 46 per cent controlling stake to Greenland and change its name to China Greenland Rundong Auto Group.
The company will sell 536,270,747 subscription shares at a price of HK$2.89 per share. According to Rundong, this represents a discount of approximately 15 per cent to the last trading price of HK$4.30.
The car dealership company is based in China’s eastern Jiangsu province and operates more than 50 dealerships, featuring brands such as BMW and Land Rover .
Rundong said the deal would enable the company to enjoy strong support from Greenland, “including but not limited to credit guarantees, strategic alignment and sharing of customer base, creating room for the group’s development”.
The firm also said the subscription, along with the resources of Greenland, would allow the group to accelerate its growth by developing in the new energy vehicle, electric car and hybrid automobile markets and promoting its automobile financing and financial leasing business,
Rundong also said the deal would help it move into the internet vehicle sales market and develop “cross-sector co-operation by establishing local community vehicle service platforms through the internet”.
The company said its goal is to become the top-tier automobile dealership and related after-sales service provider in China.