BY Fraser Tennant
In a move that takes the Chinese electric vehicle manufacturing and design service company public, CH-AUTO Technology Corporation Ltd is to merge with US special purpose acquisition company (SPAC) Mountain Crest Acquisition Corp. IV in a deal valued at $1.7bn, including debt.
Under the terms of the definitive agreement, CH-AUTO shareholders will be entitled to receive approximately 125 million shares valued at $10 per share, subject to closing adjustments.
The combined company plans to operate under the name CH Auto Inc and list on the Nasdaq stock exchange.
“The past two years have been quite challenging for us,” said Qun Lu, founder and chief executive of CH-AUTO. “We had to reduce our operations by slowing down the businesses of manufacturing of vehicles and automotive parts. By entering into this agreement with Mountain Crest, we expect to see a positive and rebounding impact on CH-AUTO’s finance capabilities, manufacturing and sales activities, and promotion of brand awareness.”
Mr Lu will continue to lead the holding company as its chief executive after closing of the transaction, which is expected in the fourth quarter of 2022.
“CH-AUTO is a unique and compelling investment opportunity, being one of the first electric vehicle automakers in China with proven technology breakthroughs as well as manufacturing innovations, along with its enormous future growth potential through its existing and pipeline vehicle models,” said Suying Liu, chairman, chief executive and chief financial officer of Mountain Crest. “I am thrilled to be partnering with Mr Lu and his exceptional team to bring their vision to fruition.”
While the transaction has been approved by the boards of directors of CH-AUTO and Mountain Crest, it will require the approval of stockholders and is subject to other customary closing conditions, including the receipt of certain regulatory approvals.
Mr Lu concluded: “Dr Liu and I are excited about the development prospect for the combined company, and we expect that CH-AUTO will rapidly transform into a leading next-generation automotive company that is built on years of design and manufacturing experience.”
News: Chinese EV company CH-AUTO to go public via $17-bln SPAC deal