On the evening of September 16, SOKON announced that it intends to acquire 50% of Dongfeng SOKON(DFSK)’s shares in order to achieve 100% control of DFSK. At the same time, Dongfeng Motor Group will receive a 25.8% stake in SOKON. In fact, as early as November 2018, SOKON announced this major asset restructuring plan. In July of this year, SOKON applied to the CSRC to withdraw the application documents for the asset transaction and plans to adjust the restructuring plan. The announcement today is an adjusted restart.
The announcement shows that Zhang Xinghai will indirectly control 46.01% of the voting rights of SOKON through SOKON Holdings and Yu’an Auto Industry Ltd. after the completion of the purchase of shares; Dongfeng Motor Group directly and indirectly holds 30.92% of the voting rights of the listed company (SOKON), and Zhang Xinghai is still the actual controller of SOKON.
DFSK was established in 2003 and is owned 50% each by Dongfeng Motor Group and SOKON. DFSK’s main business is the development, production and sales of Dongfeng brand multi-purpose passenger vehicles, mini-trucks and mini-bus series products and auto parts. SOKON said that Dongfeng Motor Group will become a strategic investor in SOKON after the completion of this transaction, which is more conducive to strong alliance.
SOKON said that China’s economy has remained stable in a reasonable range since 2018, while the macro economy is facing downward pressure, the growth of demand in the Chinese automotive market is slowing down, competition among automakers is more intense. Under the background of the industry in which the growth rate of the Chinese automobile market is steadily increasing and the competition is turning to cross-border, the growth structure of the Chinese automobile market has undergone profound changes. At present, the Chinese auto market has shifted from the incremental market to the competition in the stock market, and the development of synergy will have a way out.
In response to the asset restructuring, SOKON believes that the acquisition of the equity of the holding subsidiary with strong profitability will help to further strengthen its control over the core quality vehicle assets, help improve the efficiency of internal management decision-making and optimize the Group’s resource allocation.