Gree plan stalls

China Daily (USA) - - FRONT PAGE - By QIUQUANLIN in Guangzhou qiuquanlin@chi­nadaily.com.cn

The ap­pli­ance maker could not win ap­proval from share­hold­ers of Zhuhai Yin­long New En­ergy, a maker of elec­tric ve­hi­cles.

Ma­jor Chi­nese home ap­pli­ances and air con­di­tioner maker Gree Elec­tric Ap­pli­ances Inc has sus­pended a plan to buy Zhuhai Yin­long New En­ergy Co, af­ter fail­ing to win ap­proval from the elec­tric ve­hi­cle maker’s share­hold­ers, ac­cord­ing to a state­ment from Gree.

Gree, based in Zhuhai of Guang­dong prov­ince, an­nounced in early Au­gust it would buy all the shares of the new-en­ergy ve­hi­cle man­u­fac­turer for 13 bil­lion yuan ($1.89 bil­lion), in a strate­gic move aimed at di­ver­si­fy­ing its busi­nesses.

The ter­mi­na­tion of the ac­qui­si­tion plan would not have a neg­a­tive ef­fect on its ma­jor busi­ness, the home ap­pli­ances maker said in a state­ment to the Shen­zhen Stock Ex­change on Wed­nes­day evening.

The Shen­zhen-listed com­pany re­sumed trad­ing on Thurs­day, af­ter a sus­pen­sion since Fe­bru­ary, with its shares ris­ing 1.96 per­cent as of the close in trad­ing.

Ac­cord­ing to the reg­u­la­tions of the Shen­zhen stock mar­ket, Gree would not be al­lowed to is­sue new shares for any ma­jor ac­qui­si­tion plans.

Gree was in­formed by the Zhuhai Yin­long New En­ergy Co on Wed­nes­day that share­hold­ers of the elec­tric ve­hi­cle mak­ers had not ap­proved the ac­qui­si­tion plan, which was re­vised in early Novem­ber, ac­cord­ing to the com­pany state­ment.

Zhuhai Yin­long sold more than 7,000 new ve­hi­cles in 2015, with its pro­duc­tion value reach­ing more than 10 bil­lion yuan, ac­cord­ing to the com­pany.

Gree said in the state­ment that it would con­tinue to look for more op­por­tu­ni­ties for busi­ness growth and im­prove its profit and boost its tech­nol­ogy in the com­pet­i­tive home ap­pli­ance mar­ket.

The com­pany’s sus­pen­sion of the ac­qui­si­tion plan fol­lowed its pres­i­dent Dong Mingzhu’s res­ig­na­tion as chair­man of Gree’s Sta­te­owned par­ent com­pany, Zhuhai Gree Group, in Oc­to­ber, as part of new reg­u­la­tions un­der which on in­di­vid­ual can­not be chair­man of both a hold­ing group and a listed com­pany, ac­cord­ing to Nan­fang Daily.

Early this year, Dong said the com­pany would boost its mar­ket pres­ence by di­ver­si­fy­ing its busi­nesses, in­clud­ing en­ter­ing the elec­tric ve­hi­cle and mo­bile phone in­dus­tries.

How­ever, in­dus­try in­sid­ers said the ter­mi­na­tion of the ac­qui­si­tion plan would help Gree con­cen­trate more on its core busi­ness base.

“Some share­hold­ers in Gree even do not agree with the ac­qui­si­tion as the com­pany re­ported slow busi­ness growth in new sec­tors,” said Liang Zhen­hua, a home ap­pli­ance re­searcher with the Guang­dong House­hold Elec­tri­cal Ap­pli­ances Trade As­so­ci­a­tion.

Ac­cord­ing to com­pany sources, Gree re­ported 82.42 bil­lion yuan in sales rev­enue in the first three quar­ters, a year-onyear in­crease of 1.11 per­cent.

PRO­VIDED TO CHINA DAILY

A worker as­sem­bles an air con­di­tioner at Gree's plant in Wuhan, cap­i­tal of Hubei prov­ince.

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