According to an announcement of Dongfeng Motors released in the evening of April 22nd, the company plans to sell its share of Zhengzhou Nissan Automobile to its controlling shareholder Dongfeng Motor Co., Ltd. so as to increase the company’s revenue and functioning quality. After the transaction, Dongfeng Motors will no longer be a shareholder of Zhengzhou Nissan. It’s acknowledged that Dongfeng will resume trading in the stock market in April 25th.

 

The announcement said Dongfeng Motors has paid 336,000,000 yuan to buy 51% stakes of Zhengzhou Nissan in the year of 2005 and then further made a capital increase of 530,000,000 yuan in 2008.

 

It’s reportedly Zhengzhou Nissan’s revenue mainly comes from light commercial vehicles. This carmaker’s total asset totaled 7,464,000,000 yuan in 2015 with a negative net profit of 168,000,000 yuan. Dongfeng Motors said the functioning size and quality of Zhengzhou Nissan has been on the decrease recently. Hopefully this transaction will help the company to increase revenue and functioning quality.

 

To be noted, this transaction is not a done deal yet due to its relative huge size and potential impact to the company’s capital structure. By now, no agreement has been inked by Dongfeng Motors and Zhengzhou Nissan, so we can’t rule out cancellation or adjustment of this plan yet.