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Take in 2.2 billion dollars! Weilai lost its position as a major shareholder

2024-05-30 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)12/21 Report--

On December 18, Lai announced through a public company announcement that it had entered into a share subscription agreement with CYVN Holdings, an investment arm of Abu Dhabi, United Arab Emirates, through its affiliated company CYVN. Under the share subscription agreement, CYVN will invest a total of $2.2 billion in cash to subscribe for 294 million newly issued Class A common shares at a purchase price of $7.50 per share. After the completion of the transaction, CYVN will beneficially hold about 20.1 per cent of the total issued and outstanding shares of the company, making it the first shareholder of the company. Of course, chairman Li Bin still has 39 per cent of the super voting rights and is the largest voting shareholder of the company.

It is understood that CYVN Holdings is a majority-owned investment institution owned by the Abu Dhabi government, focusing on strategic investment and layout in advanced and intelligent mobile travel areas, and is committed to working with global industry leaders in this field. In addition, CYVN's chairman, Jassem Al Zaabi, is also Abu Dhabi's finance minister and serves as vice chairman of the central bank, vice chairman of sovereign fund ADQ, and director of sovereign fund ADIA and oil company ADNOC.

This is also the second time in nearly five months that Xilai has received an investment from CYVN. On June 20th, Weilai announced that it had signed a share subscription agreement with CYVN Holdings, an Abu Dhabi investment agency. According to the agreement, CYVN Holdings will make a total strategic investment of about $1.1 billion to Wei through the transfer of new shares and old shares. On July 12th, Weilai announced the completion of a $738.5 million strategic equity investment from CYVN Holdings.

In response to the report that "it is no longer the largest shareholder of Lulai" after getting the CYVN investment, Li Bin responded, "they have not done enough homework. First, when I went public, I transferred 50 million shares to the user trust, and now I have not lost it in the equity list, which means that I am no longer the largest shareholder in the economic sense. Second, because of my super voting rights, I still have the most voting rights, and there is little change at the shareholder voting level."

On December 4, Weilai announced its results for the third quarter of 2023, showing that during the reporting period, Weilai realized operating income of 19.067 billion yuan, an increase of 46.64% over the same period last year, and a net loss of 4.629 billion yuan, down 41.74% from the same period last year. In addition, as of September 30, 2023, Weilai held cash and cash equivalents of 45.2 billion yuan, an increase of 13.7 billion yuan over the second quarter. According to the financial results released by Weilai, although revenue has achieved positive growth for 14 consecutive quarters, the loss is also huge, with a cumulative loss of 15.554 billion yuan in the first three quarters.

Cutting unnecessary spending and continuing financing are the two paths that Ulai chooses. On December 5, Weilai and Jianghuai Motors jointly announced that Weilai Automotive Technology (Anhui) Co., Ltd. had been granted the inventory, fixed assets and projects under construction of the three factories of Jianghuai Automobile Company at a price of 3.158 billion yuan. and the structure and equipment of Xinqiao factory of passenger car company. In the public list of new products of the "Road Motor vehicle production Enterprises and products announcement" (batch 378) published by the Ministry of Industry and Information Technology, "concern of the Automobile Industry" found that the models of Weilai have been changed, the rear of the car has been changed from "Jianghuai Automobile" to "Weilai", and the name of the production enterprise has also changed from "Anhui Jianghuai Automobile Group Co., Ltd." to "Weilai Automotive Technology (Anhui) Co., Ltd." This means that Weilai has achieved independent production, no longer relying on Jianghuai Motor to achieve mass production and sales.

On November 3, Li Bin released an internal letter, mentioning that Xilai will carry out adjustments in the direction of organizational and resource investment, including a reduction of about 10% of redundant personnel and institutional settings. To this end, Li Bin admitted frankly at the conference call of the third quarterly report that the cost paid by Ulai for this was as high as hundreds of millions of yuan.

So far, Weilai has released and delivered five new cars, and Weilai has set a sales target of 250000 vehicles, which is also the goal set by Weilai to break even. However, a total of 142026 vehicles were delivered in the first November, up 33.1% from a year earlier. However, it is a long way from achieving the annual sales target. It is understood that Weilai will launch a new flagship executive car, ET9, on 2023 NIO DAY.

At present, Weilai is still increasing R & D investment and infrastructure construction to raise the moat. As of December 5, the number of power stations in Xilai has reached 2196, including 694 expressway replacement stations, 3480 charging stations and 20441 charging stations, and more than 960000 square piles. Of course, when sales failed to achieve a big explosion, Weilai put forward higher requirements for cash flow, which is also the biggest reason for its frequent financing. However, since the end of November, Weilai has begun to cooperate with other automakers to explore the power exchange business. at present, Changan Automobile and Geely Motor have signed agreements with Weilai, and more car companies will join in the future. this may reverse the pressure on the development of the power exchange business in Weilai.

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