(Yicai) Sept. 8 -- FAW Bestune, a sedan brand that Chinese automotive giant FAW Group spun off five years ago, has closed a CNY8.5 billion (USD1.2 billion) financing round.

FAW led the fundraiser, investing CNY5.2 billion, while existing investor Yueda Automobile Group contributed CNY1.7 billion, according to an announcement by the Beijing Equity Exchange on Sept. 6.

Agricultural Bank of China, China Telecom, and intelligent driving technology firm Horizon Robotics invested CNY1 billion, CNY500 million (USD70.1 million), and CNY100 million, respectively, in Bestune.

With this investment, Yueda increased its stake in Bestune to 11.4 percent from 2 percent, while FAW’s stake dropped to 79 percent from 98 percent. ABC, China Telecom, and Horizon now hold 6 percent, 3 percent, and 0.6 percent, respectively, of Bestune.

The proceeds will be mainly used for new energy technology research and development, intelligent manufacturing upgrades, and sales channel construction, Bestune said in a statement released on Sept. 6.

Founded in 2006, Bestune was once a leading marque in the Chinese market but began to lose ground to competitors in recent years. In 2019, FAW restructured its sedan business by spinning off Bestune into an independent subsidiary, planning to bring in external shareholders to enhance its market competitiveness.

In 2023, Bestune got its first CNY166.3 million investment from Jiangsu province-based Yueda, which is the joint venture partner of South Korean auto giant Kia Motors in China. Yueda Kia’s sales surged 49 percent to 248,259 units last year from the previous one.

Bestune and Yueda signed an agreement last month to cooperate on equity investment, manufacturing, supply chain, technology R&D, and services.

Since becoming an independent entity, Bestune has been in the red. It reported a net loss of CNY4.3 billion last year, widening 47 percent from the year before. However, thanks to its electrification transition efforts, its sales jumped 25 percent to a 10-year high of 151,000 units in the period, with new energy vehicle sales up 214 percent to 83,000 units.

Editors: Dou Shicong, Futura Costaglione