Kandi Technologies Announces the Completion of the Equity Transfer of the JV Company
10/07/2019
JINHUA, CHINA-- (September 30, 2019) - Kandi Technologies Group, Inc. (the “Company,” “we” or “Kandi”) (NASDAQ GS: KNDI), announced today that to accelerate the growth of Kandi Electric Vehicles Group Co., Ltd (the “JV Company”), Kandi’s wholly-owned subsidiary, Zhejiang Kandi Vehicles Co., Ltd. ("Kandi Vehicles") signed an Equity Transfer Agreement (the “Transfer Agreement”) in March of 2019 with Geely Technologies Group Co., Ltd. (“Geely”) to transfer certain equity interests. The equity transfer was forthe JV Companyto utilize Geely’s competitive strength and recognition in the automotive industry to unlock the JV Company’s potentials in branding, manufacturing capability, sales & marketing network, and after-sales service to enhance its competitiveness for greater success.Pursuant to the Transfer Agreement, the parties have agreed that Kandi Vehicles shall sell 21.47% of its equity interests in the JV Company to Geely for a total amount of RMB 516 million (approximately USD 72.4 million*(1)). Upon the completion of the transfer, Kandi Vehicles shall own 22% of the equity interests of the JV Company while Geely shall own 78%. The JV Company has completed the transfer of 21.74% of its equity interests in the JV Company to Geely on September 29, 2019.
Following the modifications of the JV Company’s business development plan in the past six months, the two parties have renegotiated and agreed the payment method of RMB 516 million for the equity transfer. As of September 29, Kandi Vehicles received cash payment of RMB 220 million(approximately USD 30.9 million), and the remaining RMB 296 million(approximately USD 41.6 million)incommercial acceptance notes, of which RMB 140 million’s note maturity date is January 20, 2020 and RMB 156 million’s note maturity date is March 29, 2020.*(2)
Additionally, the two parties also agreed on the payment installments of the accounts receivable and accounts payable between Kandi Vehicles and the JV Company. The JV Company has the total amount of RMB 311.5 million(approximately USD 43.7 million)in accounts payable to Kandi Vehicles which will be paid in three installments. The first payment of RMB 150 million(approximately USD 21.1 million)was received on September 10, 2019; the second payment of RMB 80 million(approximately USD 11.2 million)is expected to be receivedby December 10, 2019, and the remaining RMB 81.5 million(approximately USD 11.4 million)is expected to be received after the JV Company receives its 2017/2018 national subsidy payment.
*(1) Note: All of the currency conversions from RMB to USD referred to in this press release are based on the exchange rate of 1RMB = 0.140344USD, published by www.xe.com on the date before the release of this press release.
*(2) Note: A commercial acceptance note is a promised future payment, or time draft, which specifies the amount of the funds, the date, and the person to which the payment is due.
Following the modifications of the JV Company’s business development plan in the past six months, the two parties have renegotiated and agreed the payment method of RMB 516 million for the equity transfer. As of September 29, Kandi Vehicles received cash payment of RMB 220 million(approximately USD 30.9 million), and the remaining RMB 296 million(approximately USD 41.6 million)incommercial acceptance notes, of which RMB 140 million’s note maturity date is January 20, 2020 and RMB 156 million’s note maturity date is March 29, 2020.*(2)
Additionally, the two parties also agreed on the payment installments of the accounts receivable and accounts payable between Kandi Vehicles and the JV Company. The JV Company has the total amount of RMB 311.5 million(approximately USD 43.7 million)in accounts payable to Kandi Vehicles which will be paid in three installments. The first payment of RMB 150 million(approximately USD 21.1 million)was received on September 10, 2019; the second payment of RMB 80 million(approximately USD 11.2 million)is expected to be receivedby December 10, 2019, and the remaining RMB 81.5 million(approximately USD 11.4 million)is expected to be received after the JV Company receives its 2017/2018 national subsidy payment.
*(1) Note: All of the currency conversions from RMB to USD referred to in this press release are based on the exchange rate of 1RMB = 0.140344USD, published by www.xe.com on the date before the release of this press release.
*(2) Note: A commercial acceptance note is a promised future payment, or time draft, which specifies the amount of the funds, the date, and the person to which the payment is due.
