Kandi Completes Transfer of 22% Equity in JV to Geely
The deal, arranged in March, is worth $72.4 million. Kandi said it hopes to boost the operations of its joint venture with Geely through the equity shift.
Kandi Technologies Group Inc. (Nasdaq: KNDI) announced on Monday that it has completed an equity transfer of 21.74% of its stake in Kandi Electric Vehicles Group Co. Ltd. (JV company), to its long-time partner Geely.
The stake, worth $72.4 million, would give Geely Technologies Co. Ltd. 78% of the JV company, while Kandi's subsidiary, Zhejiang Electric Vehicles Group Co., would hold the remaining 22%, according to the statement issued by the electric vehicle maker today.
Since the deal was first announced in March, the two sides renegotiated the payment method. Under the new agreement, $30.9 million was transferred from Geely to Kandi in cash, while the other $41.6 million was transferred in commercial acceptance notes to expire on Jan. 20, 2020, Kandi said.
The company said it hopes the shift will advance the JV company in branding, manufacturing, sales and marketing network and after-sales services.
The partnership between Kandi and Geely dates back to 2013, when the two agreed on a 50-50 split to develop, manufacture and sell EV products and related auto parts through the joint venture.
Last month, Kandi reported its second quarter results, which showed revenue of $24.1 million, up 48% year-over-year. Net loss was $7.3 million, or 14 cents per share, in contrast to a net income of $1.4 million, or 3 cents per share, a year ago.
The Chinese EV market is expected to grow at a compound annual growth rate (CAGR) of more than 33% from 2019 to 2024, according to a market research report by Mordor Intelligence.
Kand's stock closed 7 cents lower, at $4.66 per share, on Monday.