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BAIC Motor to sell 526.3M Chinese yuan of assets to Changhe Automotive

Chinese passenger vehicles maker BAIC Motor Corp. Ltd. and its wholly owned subsidiary, Zhuzhou (BAIC) Motor Sales Ltd. Co., agreed to sell some of their assets to Jiangxi Changhe Automotive Co. Ltd., a majority-owned subsidiary of BAIC Motor's state-owned parent, BAIC Group.

The assets include machinery and equipment, vehicles, electronic and office equipment, projects under construction, intangible assets, and development expenses held by both BAIC Motor and Zhuzhou Sales, according to a Dec. 29 filing to the Hong Kong Stock Exchange.

The total consideration for the asset transfer is 531.7 million Chinese yuan, of which 526.3 million will be paid to BAIC Motor and 5.3 million will be paid to Zhuzhou Sales.

BAIC Motor's board estimates that the loss to be incurred by the proposed disposal of assets to Changhe Automotive would be nearly 28.1 million yuan.

Proceeds of the disposal will be used to replenish the working capital of BAIC Motor, according to the filing.

Completion of the deal is subject to Beijing State-owned Assets Supervision and Administration Commission of the State Council's approval of the valuation report of the assets to be sold.

BAIC Group owns 100% of BAIC Motor and 76.68% of Changhe Automotive.

As of Dec. 28, US$1 was equivalent to 6.88 Chinese yuan.