Jiangling Motors to boost capital in Ford JV, expand distribution agreement

Jiangling Motors Corporation, Ltd. (JMC) plans a joint capital increase in its controlling subsidiary, Jiangling Ford Automobile Technology (Shanghai) Co., Ltd., alongside Ford Motor Company. JMC will contribute RMB 126.378 million through debt-to-equity conversion, while Ford will invest RMB 121.422 million in cash. This transaction maintains JMC's 51% equity stake in Jiangling Ford, with the total registered capital increasing to RMB 2,678 million.

Additionally, JMC, through its wholly-owned subsidiary Jiangling Motors Sales Co., Ltd., has entered into a distribution service contract with Ford Motor Sales Service (Shanghai) Co., Ltd. This agreement authorizes Ford Motor Sales Service (Shanghai) Co., Ltd. to provide full-scale distribution services for JMC Ford brand vehicles in the China market, including localized Ford passenger vehicles and pickups.

The estimated annual distribution service fee payable by JMC to Ford Motor Sales Service (Shanghai) Co., Ltd. is expected to range from approximately RMB 250 million to RMB 300 million. Ford, holding 32% of JMC's equity, is the second-largest shareholder, making these transactions related-party dealings. The capital increase and distribution agreement were approved by JMC's independent directors and board, with related directors abstaining from the vote.