China Automotive announced that the special committee of the board has received a letter dated August 16 from the buyer withdrawing its non-binding "going-private" proposal. In a letter dated August 30, 2017 from Hanlin Chen, chairman of the company, and his affiliates, including Wiselink Holdings and Chariot, the buyer proposed to the board an offer to acquire all outstanding shares of common stock of the company not owned by the buyer in a going-private transaction. In the withdrawal letter, the buyer stated that, considering recent market conditions, it has decided to withdraw the proposal and is terminating any further discussion with the company regarding the proposal, with immediate effect.
China Automotive announced it has established a new joint venture, Hubei Henglong KYB Automobile Electric Steering, with KYB Investment , a wholly owned company of Japan KYB, for the development and production of electric power steering systems, or EPS, and other auto-related products. Based in Jingzhou City, Hubei Province, China, Hubei KYB will engage in the research, development, manufacture, sales and service of automotive electric steering systems and other automotive products. Specific product categories include column-type electric power steering system, gear-type electric power steering system, rack-type electric power steering system and other automotive EPS products. The rights to EPS technologies from both parties will be transferred to Hubei KYB with full technical support for the R&D department. Hubei KYB plans to invest approximately RMB960M and have registered capital of RMB320M. It expects to have an annual production capacity target of 5M units to significantly penetrate the Chinese and the global EPS markets. CAAS's participation will be RMB213.12M for a 66.6% ownership, funded by in-kind and cash, which include the transfer of intellectual property, equipment for EPS production and cash. The board will consist of five directors, three of whom will be appointed by CAAS including the chairman.The joint venture will lease its operating headquarter offices and factory buildings from the existing CAAS facilities in Jingzhou City. Hubei KYB will establish an independent R&D department in Wuhan City, Hubei Province, to research and develop new products and technologies. In addition, CAAS and KYB plan to transfer all their current EPS business in the Chinese market, including the business of KYB's Japanese customers in China, to Hubei KYB.