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Geely Equity Financing, Development Equity Financing

Release Time:2022-06-16 Topic:Geely Stock Quotes Today Reading:98 Navigation:Stock Liao information > Car > Domestic cars > Geely Equity Financing, Development Equity Financing phone-reading

To talk about the skills of stock trading, I think the biggest skill is how to read the market, because reading the market is equivalent to knowing and analyzing the stock market, so that you can correctly collect some information. The following are some stock trading skills to share with you "Geely Equity Financing, Development of Equity Financing", if you are interested, you can pay attention to our website!


Contents of this article:

The future of Weilai is coming? Geely's US$300 million stake in Weilai, is it a rumor or is it true? How does Geely's financing plan to acquire Volvo affect its capital structure? Expose Geely or spend 2.1 billion to win Weilai! It is expected to become the third largest shareholder! How does Geely obtain the funds required for mergers and acquisitions? How to calculate the equity ratio after financing and how much equity value is the best equity financing?

Question 1: Is the future of NIO coming? Geely's US$300 million stake in Weilai, is it a rumor or is it true?


Answer:

Profitable in the capital market, the rate of return is only a symbol, and this symbol is not only composed of wisdom and strength, More important is courage and confidence.

Today, the 2020 Hefei City Major Industrial Project Concentration (Cloud) Signing Ceremony was successfully held in Hefei, and NIO received an investment of over 10 billion yuan. Recently, the news that "Geely has invested 300 million US dollars in Weilai, and the two sides may carry out in-depth cooperation, Geely is the OEM for Weilai" has also been rumored.

However, in the face of this rumor, both parties said they would not comment. Geely said: "I don't know about this, and I won't comment on market rumors." On the other hand, Weilai said: "We do not comment on such market rumors, please refer to the announcement." However, just yesterday, Yang Xueliang, vice president of Geely Automobile, said. Posted a "like" emoji to a Weibo commenting "Geely is unlikely to take a stake in Weilai", is this an official denial?

Of course not. But such an ambiguous response also reflects that the news is not groundless. It is worth mentioning that after the rumors flowed out on January 18, NIO’s stock price rose by 7.37% and 4.41% respectively in the following two days, reaching a maximum of $4.26. However, it has since fallen back. As of press time, the future share price has fallen to $3.88, with a market value of $4.084 billion.

Some media said that the cooperation between Geely and Weilai is a good thing for both parties. The No. 1 player joins forces, which can be described as "a match for each other".

Why choose Weilai?

At the beginning of last year, Geely wanted to acquire the British supercar brand Aston Martin, but unlike the acquisition of Volvo in 2010, Geely did not have much leverage at that time, and Li Shufu also hoped that Chinese cars could Traveled all over the world, so the acquisition of Volvo not only bought the brand, but also hoped that Volvo had more than 10,000 patents, a complete R&D system, a safety experiment center and so on. In 2017, Li Shufu once again acquired a 49.9% stake in Proton Motors and the supercar brand Lotus 51.% of the shares; in 2018, Geely once again spent $9 billion to acquire 9.69% of Daimler AG's voting shares and jointly develop the next generation of Smart.

This way of mergers and acquisitions has given Geely its own brand in the mid-to-high-end market, and naturally has more chips in its hands. So Geely saw hope when Aston Martin struggled with persistent losses and had been negotiating with potential investors. However, in order to realize his dream, Li Shufu not only wanted to be a safe investor, but to fundamentally transform it, which was also the main reason for his failure.

Although Weilai cannot compete with Aston Martin, with the continuous changes in the market, various new car-making forces have sprung up. Li Shufu's attitude seems to have also changed in response to the country's various policies to encourage new energy vehicles. It was once not optimistic about building cars on the Internet. It also visited the Lixiang Auto booth at the 2019 Shanghai Auto Show and gave a thumbs up to Li Xiang, the founder of Lixiang Auto. On the same day, the vice president of Geely Automobile also shared a photo of the scene on Weibo. This is also seen as a turning point in Li Shufu's attitude towards Internet car building. After that, Li Shufu began to negotiate with Li Bin.

Why auspicious?

In fact, before the rumors of Geely and NIO spread, GAC Group issued a clarification announcement on January 16: The media report that "GAC Group plans to invest US$1 billion in NIO" is untrue. The two sides have discussed NIO's financing plan, but it is still in the early stages and no binding agreement has been formed. Although GAC's response is different from Geely's, such rumors have greatly increased NIO's stock price. As of the day of the announcement, NIO’s stock price rose 14%, and its market value rebounded to $4.5 billion.

It can be seen that the influence of rumors on the market is huge. But why did Geely have an affair with Weilai again.

We all know that most Chinese car companies are state-owned holdings, including GAC Group. It was a slump in the first place, and the state-owned car companies at this time would definitely not make a rash move.

Geely's other rival, Great Wall, may also be a good choice, and Great Wall and Weilai both started from SUV models, and their ideas are like-minded. However, Wei Jianjun has always been focusing on building his own brand. Although he has cooperated many times overseas to build or directly acquire factories, and also has a joint venture with BMW on Spotlight, he does not "buy" everywhere like Geely.

Is there a future for investing in NIO?

From Geely's point of view, a US$300 million investment in Weilai is less capital than a £200 million investment in Aston Martin, which will not put any pressure on Geely at all. Moreover, NIO is in the middle and upper reaches of the pure electric vehicle market, and it can complement Geely's pure electric brand, the downstream Geometric Automobile, and the high-end electric vehicle brand Polestar (Polestar) jointly built with Volvo. Moreover, the era of fighting alone has passed, and investing in NIO can enhance the voice of the pure electric vehicle market.

However, although 300 million US dollars is not difficult for Geely, is such a sum of money enough for Li Bin? According to NIO’s 2019 issue three financial report, operating costs, R&D expenses and sales and management expenses totaled 4.245 billion yuan, and the monthly cost was about 1.4 billion yuan. In the quarter, Weilai's revenue was only 1.84 billion yuan, and the huge loss of nearly 2.5 billion yuan was a heavy pressure on the capital chain. On the other hand, Tesla, who is already 17 years old, in the third question in 2019, Tesla's gross profit margin of vehicle sales can reach 21.8%, and Weilai is -6.8%. The 6-year-old Weilai is still a little immature. Now, Tesla has arrived at the "doorstep". Weilai, which has regarded Tesla as a competitor since its birth, urgently needs a reliable investor to compete with Tesla.

In addition to capital issues, the issue of company control is also a factor that Geely considers. Weilai currently adopts the rare ABC three-tier equity structure. Class A shares have 1 vote per share, Class B shares have 4 votes per share, and Class C shares have 8 votes per share. Currently, one and only major shareholder Li Bin holds Class C shares, holding 15,100 shares, with a shareholding ratio of 14.4% and voting rights of 48%; the second shareholder, Tencent, holds Class B shares, with voting rights of 21.6%.

After Hillhouse Capital's liquidation and exit, although Geely only invested 300 million US dollars, it will become the third largest shareholder after Li Bin and Tencent. It is not ruled out that Geely, with its deep pockets, will completely acquire Weilai Automobile in the future. Geely can also use Weilai to have a positive PK with Tesla.

Taking into account, Geely itself has both technology and sales.Not a small advantage, can investing 300 million US dollars in Weilai in exchange for the same value.

Does Weilai really need Geely?

Counting the financing history of Weilai can be said to be a history of blood and tears.

The failure of the cooperation with GAC caused Li Bin to continue to lose blood. After completing the 2020 Hefei City Major Industrial Project Concentration (Cloud) signing ceremony today, Li Bin seems to be able to shed tears of excitement. . This signing ceremony not only finalized the start of the JAC NIO ES6 mass production project, but also allowed NIO China headquarters to finally settle in Hefei, with an investment of over 10 billion yuan. This also means that the previous cooperation between Yizhuang State Investment and Weilai may have fallen through.

In addition to being happy, Li Bin should also consider whether he needs auspiciousness. Of course, this may also be Li Bin's wishful thinking. However, regardless of the successful cooperation, Li Bin's Weilai Automobile was still listed in the United States, and its stock price rose 319% within four months. In the next few years, no one can predict the direction of the auto market and how long the negative sales growth will last. Whether it is a traditional car company like Geely, or a new car maker like Weilai, market pressure is inevitable.

Therefore, in such a special period, Weilai does not want to miss the opportunity of financing, and Geely's participation in Weilai is also a big challenge. Whether Li Bin will compromise or Li Shufu is more courageous, the answer will be left to time.

This article comes from the author of Autohome Chejia, and does not represent the views of Autohome.

Question 2: How will Geely's acquisition of Volvo's financing plan affect its capital structure


Answer: According to the chairman of Geely According to Li Shufu, the acquisition of 100% stake in Volvo Cars is $1.8 billion, including $1.6 billion in cash and $200 million in checks. In addition, Geely has prepared $900 million for Volvo's follow-up operations.

According to this, Geely has prepared about 2.7 billion US dollars for the acquisition and operation of Volvo. Li Shufu said that of the 2.7 billion US dollars, half came from overseas and the other half came from China. Geely accounted for 51% of domestic funds. According to Geely's internal sources, the London branch of Bank of China led the establishment of a syndicate to provide loans for the transaction, and Geely's own investment will be between 700 million and 800 million US dollars. In addition, a provincial government financing platform will also participate in the funding.

Geely's acquisition of Volvo will not change the auto industry in the short term, but only Geely's capital structure. This structure is beneficial to Geely's long-term financial strategy. At the root of the financial structure is financing and sources of financing. There are many speculations and reports about where the $1.8 billion (or more 2.7 billion) came from, but Geely officials say nothing. We can splicing and reasoning from three types of pieces of information.

(1) Li Shufu said in an interview with the media, "There are many sources of funding, such as our loans from European banks, loans from the Belgian and Swedish governments, and financial support from Ford, that is, the credit support from their sellers. There is also some support from the Bank of China, as well as financial arrangements from Geely Hong Kong and Zhejiang Geely, and a small number of investment companies from local Chinese governments.”

(2) CCTV reported that this acquisition” Domestic and foreign capital each account for 50%.” Or the "domestic 51%" announced by Geely's press conference.

(3) According to previous reports, Goldman Sachs made a strategic investment in Geely listed companies in 2009. Geely will receive HK$2.586 billion (approximately US$330 million) after the issuance of convertible bonds and the full exercise of warrants.

We roughly calculate:

The international financing of 900 million US dollars comes from four parts. The first part, European government loans, mainly from the Belgian and Swedish governments, the second part, European financial institution loans, mainly from European banks, the third part, international strategic investors, mainly from Goldman Sachs, the fourth part, Ford financial support.

Domestic financing of 900 million US dollars, from three parts. The first part, Chinese banking institutions, the second part, the investment companies of local governments, the third part, Geely Hong Kong and Zhejiang Geely's own funds.

In these seven sectors, there are two types of funds that can be "negligible":

First, financial support from Ford. It can be seen as "symbolic" and "moral". A person who is selling his sons and daughters, his house and his blood (just about to sell his wife), how much money can he lend to you?

Second, Geely Hong Kong and Zhejiang Geely have their own funds. In 2008, the net profit of Geely Hong Kong-listed companies increased by 191%, but it was 879 million. Gross estimate, the profit of Geely Group in 2009 will only be between 1.5 billion and 3 billion at most. And Gili Lanzhou factory expansion, mergers and acquisitionsZhongyu, coupled with the increased sales target for 2010, can be said that Geely is spending money. That profit can only be a drop in the bucket. Therefore, the "own funds" in the acquisition of Volvo can only be regarded as a kind of self-embellishment of Geely.

Ignoring the above two, there are five financing channels left.

Among them, European government loans should be long-term low-interest or interest-free loans. Of course, the purpose is not to ask for interest, but to make Geely some commitments on Volvo production, employment and labor policies; European bank loans, Chinese bank loans , should all belong to general debt financing.

In this way, there are only two more "ambiguous" financing channels left.

The first is Goldman Sachs' convertible bond financing. Although Geely denies that Goldman Sachs funds are used for Volvo acquisitions, but for factory investment. But the meat is actually rotten in the pot, there is no essential difference.

The second is a Chinese local investment company. In China, local investment companies are roughly equivalent to local governments to some extent. In the financing of 900 million US dollars, according to the credit process of domestic banks and the risk assessment combined with Geely's assets and profitability, I don't think domestic authentic banks will lend more than 3 billion yuan (with Geely's credit and profitability). Risk, the loan period will probably not exceed 5 years. What does 5 years mean? In case you are going to close down and liquidate, I can still sell some money for the factory equipment you just built and have not yet been depreciated). Based on this calculation, we can think that the support from the local government to Geely should be at least about 4 billion yuan.

Which local governments gave Geely support? unknown. But then you might as well look at three things. Where will Geely's factory be located in the future? Where is the tax paid? Where is the supplier from? Also, which cities have so many monopoly state-owned enterprises that they have nowhere to go?

Geely's financing structure is unclear. But at least from the existing news, debt financing accounts for the majority of the proportion.

It can be concluded that the acquisition of Volvo, from a financial perspective, means to Geely:

First, the asset-liability ratio has increased, which has greatly increased the financial leverage. That is, the return on common stock corresponding to equity capital is magnified. Coupled with the initial positive effect of the acquisition, Geely's share price will soar further.

Second, Geely's corporate valuation will also rise. In the next round of financing negotiations or selling the business, you will be in a very good position.

Third, Geely's financial risks will surge. Li Shufu said that Volvo turned losses into profits in 2011, which is not a lie. It's not that Li Shufu wants to release satellites, but that he has to. If Volvo's cash flow still cannot "feed back" Geely in the next three years, then Geely will face great debt repayment pressure. In response to Volvo's development issues, Li Shufu talked about the concept of "cost reduction" in the media meeting on the evening of March 30, "(Volvo) has formed a large number of intellectual property rights and formed a large number of technologies. Due to the relatively small scale, each The cost of the car is better, so it loses money. So we need to find a way to give full play to these technologies and expand the sales of these products. Only when the scale is expanded, the cost of each car will drop, and profits will appear. Got it..."

Frankly, this answer is very textbook, even hollow and weak. Hope is not all of Li Shufu's strategic thinking.

In addition to betting on stock price, market value, betting on another round of financing, betting on Volvo's quick profit, what other means does Geely have to deal with financial risks?

First, for debt service in financial risk. Since the proportion of local investment companies in the debt structure is very large (it can be guessed that in European government and bank loans, Chinese local governments may not have the role of guarantor), Geely will have a large operating capital gap in the future. Can only rely on the local government to continue blood transfusion. Therefore, Geely successfully "kidnapped" the local government through the acquisition, and the risk of its survival was dispersed instead, and it truly became a "little strong" who is not afraid of death and cannot be beaten to death.

Secondly, Geely's financial risk is not only repaying the principal and interest, but also hanging interest rates and exchange rates. However, under the expectation of China's economic inflation and RMB appreciation, Geely may greatly reduce the actual debt service cost. (Of course, if China's economy really responds to the recent "bad talk" by Li Daokui and others and falls into recession, then it can only be regarded as auspicious and unlucky).

There is also a third method, that is, local investment companies make part of the equity investment in Geely. Or the agreement stipulates that equity can be used to replace the creditor's rights (equivalent to Yang Bailao selling Xi'er). Well, congratulations to Geely, it has upgraded from a private brand to a state-owned shareholding (holding) enterprise. Under the leadership of Li Shufu, a deputy to the National People's Congress, Geely is moving towards a "red and specialized" path.

Question 3: Heavy! Expose Geely or spend 2.1 billion to win Weilai! It is expected to become the third largest shareholder!


Answer:

According to media reports, Geely Automobile plans to invest 300 million US dollars (about 2.1 billion yuan) in NIO, and points out that according to NIO's just-made transfer in the primary market The debt is calculated at US$3.07. After this round of investment, Geely will account for less than 10% of the shares of NIO. At present, the major shareholders of Weilai Automobile: Li Bin 14.4%, Tencent 13.3%, BAILLIEGIFFORD & COLTD 9.7%, the total share capital of 1.053 billion shares, excluding conversion, new capital will dilute the equity, if this round of investment is completed, Geely will Become the third largest shareholder of NIO.

In response to relevant reports, Yang Xueliang, vice president of Geely Automobile Group, said today that he "doesn't know about the matter, and he doesn't comment on market rumors." The announcement is the main one."

It's nothing new that NIO's capital is tight, and officials have confirmed that financing projects are actively underway. If Geely takes a stake in NIO, it will also have a certain mitigation effect on NIO's follow-up funding problems.

Geely Automobile is the first brother of domestic independent brands. It has successively acquired Volvo Cars, Proton and Lotus, and has also become the largest shareholder of Daimler Group, but it is still blank in high-end pure electric vehicles. , although the geometric pure electric vehicle series was launched, the sales volume was not very impressive. If Geely takes a stake in NIO, it will be of great help to Geely Auto in impacting high-end pure electric vehicles.

Judging from the content of the responses from both parties, neither party has made a direct denial. Regarding matters related to Geely Auto's investment in NIO, we will continue to follow up and report on any follow-up progress.

NIO was established in November 2014. It owns three models: NIO ES6, NIO ES8 and NIO EP9. NIO has a 5-year history of development. It has become a well-known domestic enterprise of new energy vehicles, and has the title of "domestic Tesla" in China. Although NIO is still the strongest among the new car-making forces, it is no longer an open secret that NIO is short of money. The financial report shows that in the second quarter of 2019, the revenue was 1.508 billion yuan, and the net loss attributable to shareholders was 3.285 billion yuan; in the third quarter, the revenue was 1.837 billion yuan, and the net loss was 2.451 billion yuan. Weilai's road to profitability is still very long.

On January 15, some media reported that NIO was negotiating with GAC Group and other auto manufacturing companies, among which GAC Group plans to invest 1 billion US dollars. After the news was exposed, NIO’s stock price rose for several days, but it backfired. The next day, GAC Group issued a clarification announcement saying that it was indeed discussing financing matters with NIO, but it was still in the early stage, and the financing amount would not exceed 1.5 One hundred million U.S. dollars.

Although the financing between NIO and GAC Group has not yet been reached, in the past half month, NIO has obtained a financing project of 200 million US dollars, although 2 The financing of US$100 million is still a drop in the bucket for NIO, but it also solves NIO's urgent needs.

On February 6, NIO announced the completion of a $100 million convertible bond financing project; on February 14, NIO issued another announcement announcing the completion of a $100 million convertible bond financing Both financings were funded by unrelated Asian investment funds. NIO said that the four Asian investment funds subscribed are all pure financial investors.

In addition, Weilai Automobile, which was supposed to pay wages on February 8 this year, did not pay it as scheduled. In this regard, Weilai Automobile said that the delayed payment date was due to the delay in the resumption of work due to the epidemic. Bring about changes in the rhythm of business management. At the same time, a plan for employees to voluntarily exchange thirteen salaries for stocks was launched, and employees could choose to take salary or take the company's stock within the corresponding amount.

In terms of sales, in the past January, NIO delivered a total of 1,598 new cars in January, down 11.5% year-on-year, of which 1,493 ES6s were delivered and only 105 ES8s were delivered. . As for the reasons for the reduction in deliveries, Weilai said that it was related to the reduction of effective working days caused by the Spring Festival holiday, and the decline in sales performance due to the new crown pneumonia epidemic and extended holidays.

Affected by the epidemic, many auto companies have extended their resumption of work until mid-to-late February, and NIO is no exception. At present, NIO has announced the resumption of work. There is no doubt that the sales in January fell. It is expected that the epidemic will have a greater impact on NIO's production and sales in February.

This article comes from the author of Autohome Chejia, and does not represent the views of Autohome.

Question 4: How does Geely obtain the funds needed for M&A


Answer: On March 28, at Volvo headquarters, Geely Chairman Li Shufu attended the press conference. Photo by Xinhua News Agency reporter Wu Wei

On March 28, 2010, Zhejiang Geely Holding Group Co., Ltd., a Chinese private automobile enterprise, and Ford Motor Company signed an equity purchase agreement. Geely Holding Group purchased Volvo Car Company for 100 million US dollars. % equity and related assets including intellectual property. As one of the most significant overseas acquisitions in China's auto industry to date, this is not only an important step forward for Geely Holding Group, but also a historic moment for China's auto industry.

Yesterday, Geely Holding Chairman Li Shufu, who had just returned from Sweden, led Geely executives to appear in Beijing and told the details behind Geely's acquisition of Volvo.

How did Geely win the bid?

Li Shufu said: "Geely has been studying Volvo for more than 8 years, and it has been in official communication with Ford about the acquisition of Volvo for nearly 3 years."

Geely Vice President Zhang Peng also said bluntly: "Geely is very interested in Volvo. The brand has been in love for a long time.”

According to reports, as early as 2008, after Ford first indicated that it might give up Volvo, Geely secretly set up a project team to be responsible for the acquisition of Volvo. Zhang Peng was one of the core members of the project team. . According to him, the project team will carry out three aspects of work immediately after its establishment: first, to conduct in-depth, comprehensive and detailed understanding and research on Volvo; second, to formulate an overall acquisition strategy; third, to formulate a detailed timetable for the entire operation and planning. At the end of 2008, Geely submitted a bidding proposal to Ford for the first time. This proposal, which took a whole year to carefully crafted, left a good first impression on Ford, "because it was very well prepared and the data inside was very detailed. , which laid the foundation for Ford to negotiate with us."

In mid-January 2009, Li Shufu led a delegation to meet with Ford's chief financial officer, chief executive officer and chairman of the board. first official meeting. Then Geely received an official invitation from Ford, and the acquisition process for Volvo began.

On October 28, 2009, Ford announced that Geely was the preferred bidder for Volvo.

Why did Ford choose Geely among Volvo's bidders? Li Shufu believes that Geely and Volvo can be called "love and love". "Our understanding of Volvo, our understanding of the auto industry, our understanding of Ford, and our core competitive philosophy are all important reasons for Ford to choose us." Li Shufu said, "It's not that money can buy it. Volvo, on the other hand, doesn't mean you can't buy it if you don't have much money."

Where did the money for the acquisition come from?

As a world-renowned luxury car brand, Volvo's appeal is self-evident, but it also determines that Volvo's value will not be too low. What's more, after Ford released the wind to sell Volvo, a large number of international buyers were waiting to compete with Geely. Li Shufu said frankly: "There are many people who buy from Sweden, from the United States, the United Kingdom and other countries. The competition is very fierce." For Geely, in addition to preparing an excellent acquisition plan, more importantly, Have to raise the huge amount of money needed for the acquisition.

The final price of Geely's acquisition of Volvo is $1.8 billion. Ford confirmed that on the day of the signing, Geely had deposited the money into Ford's account, including $1.6 billion in cash and $200 million in checks. But this is just the beginning. According to Yin Daqing, the financial director of Geely Holding, after the acquisition is completed, Geely will also provide Volvo with the liquidity needed for subsequent operations, with an amount of roughly US$900 million. In this way, at least 2.7 billion US dollars, or about 18 billion yuan, need to be raised for the acquisition of Volvo Geely.

In 2009, Geely sold 330,000 vehicles, with a sales revenue of 14 billion yuan and a profit of 1.2 billion yuan—that is to say, Geely had to save enough profit for 15 years to buy Volvo.

After the news of Geely's acquisition of Volvo came out, there were a lot of doubts about it. Yin Daqing said that Geely's development has given it the ability to acquire large-scale companies like Volvo, and that all $2.7 billion of funding has been arranged before signing a definitive sale and purchase agreement with Ford. According to reports, half of the money was raised domestically and half from overseas; among them, the domestic financing was divided into two parts—one half was Geely’s own funds, and the other half was M&A funds raised from domestic banks; foreign financing From the United States, Europe, Hong Kong and other places. It can be seen that only a quarter of the total US$2.7 billion required for the acquisition of Volvo was paid for by Geely itself, which is equivalent to more than 4 billion yuan in RMB. In terms of auspicious years, it is not a big problem.

When will Volvo be profitable?

Yin Daqing bluntly stated that the 27 funds raised for the acquisitionThe US$100 million is Geely's "blood transfusion" to Volvo, but after the acquisition is completed, Geely wants Volvo to form a "blood-making" function, "It is for making money, not for blood transfusion."

But Volvo, which has been anemic for a long time, will recover. Self-hematopoiesis is no easy task.

Volvo has been described by the media as a noble lady from a down-to-earth family. Since 1995, its share in the global luxury car market has dropped from 14.9% to 8.2%. Since 2005, Volvo has been losing money for five consecutive years, with an annual loss of more than $1 billion. The poor financial situation forced Ford to reluctantly part with it, selling Volvo, which it bought for $6.5 billion that year, for $1.8 billion.

To take over a car company that can't even play Ford, Geely needs not only guts, but also the ability to make it profitable.

Li Shufu believes that Volvo's biggest problem now is that its scale is too small, and the cost is high, and it is easy to lose money. "We want to expand Volvo's sales and reduce costs." According to reports, Geely plans to build a new production base in China while retaining Volvo's Swedish factory to promote Volvo's localization. The first-phase production scale of the base has an annual output of 300,000 vehicles. Geely plans to increase Volvo's global annual output to 900,000 vehicles in the next five years, and to increase Volvo's annual output to 2 million vehicles in the foreseeable future.

At the same time, Geely also plans to increase the proportion of Chinese spare parts procurement in Volvo's global procurement chain. The goal is to increase the proportion of Chinese spare parts by 8% every year, and exceed 40% after 5 years, which can reduce the procurement cost by at least 1.2 billion in 5 years. At the same time, the export of parts and components can bring Geely $4 billion in sales revenue every year, killing two birds with one stone.

Geely is optimistic about Volvo's profit prospects, because Volvo does have unique technology. Technologies such as three-point seat belts, two-stage departure airbags, automotive safety glass, and three-way catalysis, which are widely used in the automotive industry, are Volvo's "representative works". In recent years, Volvo has invented the city safety system and pedestrian protection safety technology that can automatically brake. Despite years of losses, its R&D investment is almost the same as that of Mercedes-Benz and BMW. It is a strong player.

The earnings forecast made by Geely's financial adviser Rothschild Bank said that after being acquired by Geely, Volvo could achieve a profit in 2011 and a pre-tax profit of US$703 million in 2015. This further enhances Geely's confidence.

Where will Volvo be located?

After the news that Geely will promote Volvo's domestic production, it has attracted the attention of many local governments. Where will Volvo be located? Yesterday, Geely kept silent.

For local governments interested in accepting the Volvo project, Geely's condition is that the local government must provide real money to fund the project. Following the track of the financial transactions of Geely's acquisition of Volvo, we can see some clues about the location of Volvo's project.

In order to acquire Volvo, Geely registered Geely Triumph International Investment Company, Geely Wanyuan International Investment Company and Geely Kaixuan International Investment Company successively. The registered places of these three companies are Beijing Yizhuang, so there are rumors that Beijing Yizhuang is a candidate for the Volvo project to settle in China.

At present, Geely Wanyuan has a total of 7.1 billion yuan in its account, of which 4.1 billion yuan comes from Geely Kaisheng, and the other 3 billion yuan comes from Daqing State-owned Assets Management Co., Ltd. It is also worth pondering what role Daqing will play in the Volvo project.

It is said that Li Shufu and TAC once reached an oral agreement that TAC would invest in the Volvo project with land and funds, and the base would be located in the TAC plant in Tianjin Binhai New Area. However, because Tianqi did not have enough funds and believed that Geely's acquisition of Volvo was too risky, the cooperation finally fell through.

In addition, the Chengdu Municipal Government has prompted the Bank of Chengdu and the Chengdu Branch of the China Development Bank to cooperate with Geely's financing acquisition. In this way, Chengdu seems to also have a share of the Volvo project.

Question 5: How to Calculate the Equity Ratio and Equity Value After Financing


Answer: Other circumstances (such as negotiation) are not considered. After the financing, the new shareholders will determine the shares according to the proportion of the invested capital to the new capital, and the original shareholders will be diluted in the same proportion.

For example,

A, B and C invest in a company. The registered capital of the company is 3 million yuan, and A, B and C each contribute 1 million yuan. In order to expand the scale of business a year later, the company will hold a shareholders meeting and hope that the three shareholders The capital was increased to 10 million in total. At this time, A and B expressed their willingness to continue to invest, but C expressed their unwillingness to make additional investments. How to recalculate the shares held by these three people at this time? How much will C's shares be diluted?

According to Article 35 of the "Company Law", when a company increases capital, shareholders have the right to give priority toHowever, all shareholders agree not to give priority to the capital contribution according to the capital contribution ratio. Therefore, according to the provisions of this article, when the company increases capital, there are two methods, that is, according to the original capital contribution ratio or according to all shareholders. convention.

Combining the case, it is possible to hold a shareholders meeting to make an agreement on the capital increase. If C still clearly expresses his unwillingness to make additional investment, it should be regarded as C's waiver of the priority of the capital increase. According to the original capital contribution ratio, the capital increase is carried out at a ratio of 1:1, that is, both parties A and B will increase their capital by 3.5 million yuan. After the capital increase, the company's equity is as follows. The company's registered capital is changed to 10 million yuan, of which A contributed 4.5 million yuan and B contributed 4.5 million yuan. Yuan, C contributes 1 million Yuan, and C holds 10% of the company's shares

Question 6: How much equity is the best to sell?


Answer: Since you want to raise money, it means that you are really short of money. So in your financing process, you will naturally stare at the money bags of various capital bosses, and imagine how to get a part and as much as possible. But how many shares to sell and how much to raise? That's the problem.

I remember Mr. G·SSC Li of Rui Rong said that with regard to equity financing, you need to understand the following aspects:

1. What resources can investors provide you

In the eyes of the founders Here, investors can call the shots. Although the actual situation is not so exaggerated. But there is no doubt that investors have abundant resources. Among them, there may be just the resources you need urgently and have great value for the development of your enterprise. These resources are even more valuable than the money investors put into you. So some people say that "financing is the source of financing", which is very reasonable.

2. What value-added services can investors provide you

Most investors will claim to provide various value-added services for enterprises, including management consulting, marketing support, enterprise transformation, packaging and listing, and so on. But not all investors have the ability to provide companies with these. So you need to be clear about which investors can provide value-added services, what they can provide, which value-added services are more valuable to you, and which ones are just for fun.

3. What do investors expect from you?

Investors put so much money in, and they don't care about everything, but they will come with a lot of conditions and requirements. Although these are generally reflected in investment terms, it is necessary for you to understand some key issues in advance and be aware of them.

4. Whether the investor is a strategic investor

Most of the investors are financial investors, who just want to realize capital appreciation by investing in your business, but have no interest in controlling the business. But if you're dealing with a strategic investor, you need to be careful. The appeal of strategic investors is not just to make money, but may also have other purposes. The biggest threat to you is the coveted control of your business. Every time such a case occurs, it will lead to a dismal exit for the founder.

5. The investor's past investment style and word of mouth

Once the investment relationship is established, the investor will get on your thief boat, and you will be tied together. In the future, there will be many storms that you need to face together. This requires you to be in the same boat. But whether you can do this depends on whether your style is harmonious. In addition, the reputation of investors is also very important, which is a test and evaluation of investors in the past by the market.

If you are clear about these, then how much equity is sold, how much financing, and what benefits can be brought, right? I suggest you go to the official website of Ruirong Financial Services.

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Expanding knowledge about "Geely Equity Financing, Development Equity Financing"


Knowledge 1:


What is the meaning of simulated stock trading

Answer: The simulated stock trading is a simulated stock trading market that uses the Shanghai and Shenzhen A-share and B-share markets to invest.

Generally, the starting capital of each player in the market is set to a certain amount of RMB, and people can use these funds to entrust stock trading;

The rules of stock trading are basically the same as those of the stock exchange.

VolumeThe control of the simulated stock trading system is handled as follows:

1. The simulated stock trading system polls the transaction of the market, and the transaction price and volume of each tick , as the basis for matchmaking in the simulated stock trading system;

2. All the accounts in the simulated stock trading for the entrustment of this stock shall be arranged according to the principles of price priority and time priority. The above-mentioned sub-transactions are executed first in the first order. The price of the transaction is the price of the real transaction, and the volume of the transaction is the volume of the real transaction;

3. If the account in front of the transaction is executed After finishing, if there are still sub-volumes that have not been matched, the system will continue to trade the next account;

4. The above process is repeated continuously, so as to match the simulated disk make a deal.


Knowledge II:


If the stock falls, will I have no money?

Answer: The so-called limit-down of stocks also has a limit of up and down. If the stock falls by 10% or the stock falls by 5%, it is regarded as the limit-down of the stock. The falling limit of the stock does not mean that the investor's account has no money, but that the money in the investor's account is 10% less than the original, and the account funds have shrunk, not that the loss is completely gone.

Comments on "Geely Equity Financing, Development Equity Financing"


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Netizen Comment Two


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Keywords in this article: Geely equity financing, development equity financing

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