Taiwan Yulong Automobile (2201): Sell Textile Holding Company To Account For Billions Of Cash.

Yulong motor (2201) held a press conference on 10 October to explain that 10 days the board of directors adopted the merger of Limited by Share Ltd and Xiang Wei investment Limited by Share Ltd through its subsidiary Yuan Wen investment. It will continue to invest in Limited by Share Ltd investment company, and the datum date is set for June 3, 2019.

Yulong explains that Yuen Wen investment is a subsidiary of Yulong automobile 100%, and Xiang Wei investment is a subsidiary of Taiyuan textile company 90.6%.

The merger focuses on integrating cross shareholdings, focusing on the automotive industry and reducing the scope of management. Therefore, the Yuan Wen investment company holding shares in the textile business will be merged with the Xiang Wei investment company, which is also a textile company.

Yulong said that the paction price of the case was estimated to be about 11 billion 550 million yuan by the external professional appraisal company's equity appraisal report, which would increase about 2 billion 500 million yuan after Yulong automobile's net profit after tax. It will be accounted for as soon as possible before the end of June.

Yulong said the paction will be funded to boost working capital and strengthen its financial structure.

Yulong pointed out that in order to enhance the efficiency of the group and the management efficiency of various companies, Yulong group divided its undertakings into four major businesses, such as automobile, textile, real estate and financial level.

The Yulong textile system undertook the adjustment of the textile and Taiwen knitting stock. After this adjustment, it will not only be integrated with the cross shareholding of the automobile industry, but also reduce the management scope, which will help to focus on the specific business management.