Saturday, January 30, 2010

China-based auto parts manufacturer purchases majority stake in the BVI company

Wonder Auto Technology Inc, an auto parts maker based in China, has received greater access into auto safety and electronic systems market after having purchased a majority stake in the British Virgin Islands-registered Applaud Group Limited, which owns 52.2 per cent of a hi-tech auto parts supplier Jinsheng Automotive Safety Technology Holdings Ltd.

The acquisition was made through two deals. The first deal was when Wonder Auto's wholly-owned subsidiary, Wonder BVI, entered into an equity transfer deal with another British Virgin Islands-registered corporation Novophalt (China) Limited. Under the deal, Wonder BVI will purchase its 20.95 per cent ownership of Applaud Group Limited.

The second deal was closing of a similar acquisition deal by other wholly-owned subsidiary of Wonder Auto's, Yearcity Limited, with a British Virgin Islands corporation Wonder Employee Capital Limited (WECL). By terms of this deal, Yearcity will purchase its 17.46 per cent ownership of Applaud from WECL.

As a result of these deals, Wonder Auto bought 38.36 per cent of Applaud and thereby became the owner of 20.02 per cent of Jinsheng. The acquisition is strategically significant, as the deal will help Wonder Auto and Jinsheng to fully use their customer bases, expanding cross-selling, upgrading Research and Development sector, sharing technologies and increasing value-added services of existing products.

Wonder Auto is China's leading company in the field of the design, development, manufacturing and sale of auto electrical parts, its products being concentrated toward components for autos with engine capacity below 1.6L. It has experienced rapid growth in the last years, along with the expansion of this market segment and the worldwide trend towards environment-friendly low emission vehicles.