Shenzhen Capital Group-backed automobile alternator manufacturer Zhejiang Dehong Automotive Electronic & Electrical Co., Ltd has agreed to sell a 29.99 per cent stake to state-owned Asset Management Service Center of The Government of Ningbo Zhenhai for 1.087 billion yuan ($154 million), per a filing with the Shanghai Stock Exchange.
With the deal, Zhenhai Investment will become the largest shareholder in Dehong. State-owned Asset Management Service Center of The Government of Ningbo Zhenhai, the parent company of Zhenhai Investment, will serve as an actual controller.
The deal comes at a time when the government of Ningbo is looking to accelerate the development of an automobile industry ecosystem by 2025.
Dehong, founded in Huzhou in 1978, produces approximately 300 categories of models to cater to the medium and high-end commercial vehicle engines, with a market share exceeding 20 per cent in China. Dehong got listed in Shanghai in 2016.
Its top clients include Jiangling Motors, heavy-truck giant Sinotruck, diesel engine producers Dongfeng Chaoyang Diesel and Kunming Yunnei Power, JAC Motors, among others.
Dehong closed 30 million yuan ($4.2 million) in strategic investment from state-owned Shenzhen Capital Group and Zhejiang Hongtu Investment in 2010.