Fortis Auto Air-conditioning's third shareholder to sell stake

Jihua Investment Management Co., Ltd. plans to transfer its holding of 6.89% equity of Mudanjiang Futong Automotive Air Conditioning Co., Ltd., with a listing price of 26.688 million yuan.

Fortis Automotive Air Conditioning Co., Ltd. was established on June 18, 2002 with a registered capital of RMB 121 million. Its business scope is automotive air-conditioning compressors and its systems. Among the shareholders of the company, Mudanjiang Huatong Automotive Parts Co., Ltd. holds 79.88% of the shares of the subject company, Fu Ao Auto Parts Co., Ltd. holds 11.99% of the shares, and the transferee Fang Jihua Investment Management Co., Ltd. holds 6.89%, the state-owned assets of Mudanjiang City. Investment Holdings Co., Ltd. holds 1.24%. The original shareholders of the target company do not give up the exercise of the right of first refusal.

In fact, the original largest shareholder of the target company was Weichai Power (34.58-0.09% share bar research report) (000338). In January of this year, Weichai Power stated that in accordance with the company's development strategy, it is planned to transfer 59.84% of the equity of Fortis Automotive Air Conditioning to Mudanjiang Huatong Automotive Components Co., Ltd. The transaction is now complete.

The target company has better profitability. According to financial data, the target company achieved operating revenue of RMB 550 million in 2010 and net profit of 493.1303 million yuan. The company’s monthly report on January 31 this year showed that the company achieved operating revenue of RMB 35,753,700 and net profit of RMB 949,300.

As assessed by Beijing Zhongqihua Assets Evaluation Co., Ltd., on June 30, 2011, the book value of the company’s total assets was 519 million yuan, the assessed value was 563 million yuan, and the book value of net assets was 305 million yuan. It was 359 million yuan; the corresponding assessment value of the transfer target was 24.708 million yuan.

The transferor requires that the intended transferee should be a legally registered enterprise legal person or a natural person with full civil liability, and must have good financial and economic capabilities; the intended transferee’s net assets in the previous year must not be less than 50 million yuan. The asset-liability ratio is not higher than 40%.