Caixin
Sep 24, 2020 05:45 AM
BUSINESS & TECH

XCMG Completes $3 Billion Mixed-Ownership Restructuring

What’s new: Chinese construction equipment maker Xuzhou Construction Machinery Group, known as XCMG, brought in 16 new shareholders as part of a two-year mixed-ownership restructuring to convert from a wholly state-owned enterprise to a mixed-ownership corporation.

XCMG said the mixed-ownership overhaul involved a 15.66 billion yuan ($2.3 billion) injection of new capital and a 5.4 billion yuan ($793 million) equity transfer, making it the largest mixed-ownership project this year.

After the restructuring, the company’s state parent will hold a 34.1% stake, with 16 other shareholders — including state-controlled financial institutions, industrial funds, local state-owned enterprises in Jiangsu province, private investment institutions and an employee stock ownership platform — holding the remaining equity.

The strategic investors will take three seats on the nine-member board of directors, the company said.

The background: China launched the mixed-ownership program in 2013, aiming to bring private-sector investment and management into state-owned enterprises to improve their efficiency.

Last year, XCMG’s industrial internet unit, XCMG Information, brought in 300 million yuan of investment from a group of private investors.

In 2019, XCMG reported net profits of 3.72 billion yuan on revenue of 78.3 billion yuan.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

Support quality journalism in China. Subscribe to Caixin Global starting at $0.99.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code