(Yicai Global) March 28 -- Weifu High-Technology Group Co. will invest in US automotive electric-drive technology developer Protean Holdings Corp. and form a joint venture with its China unit to promote the company's market position in new-energy vehicle drive systems. Weifu plans to spend USD30 million to purchase E-round preferred stock issued by leading auto parts manufacturer Protean Holdings, the former said in a statement yesterday.
Protean Holdings, based in the eastern US state of Delaware, will also issue stock warrants to the company at a ratio of 75 percent of the investment amount, subject to satisfaction of the preconditions the parties have stipulated. If fully exercised, the company will eventually obtain a 12.43 percent stake in the underlying company to become its second-largest shareholder, per the statement. Unlike a stock option, a warrant is issued by the company, rather than an exchange, and backed by a new share issue.
Weifu will also register a joint venture in Wuxi, Jiangsu province with Protean Electric Ltd., a wholly-owned unit of Protean Holdings. Weifu will invest USD16 million and Protean Electric will contribute USD4 million, making up 80 percent and 20 percent of the registered capital, respectively. The joint venture will use Protean Holdings' technology to produce and process electric-vehicle drive systems, in-wheel electric drive products and ancillary systems, the statement said. Protean Electric has developed an in-wheel electric drive system for hybrid, plug-in hybrid and battery electric light-duty vehicles. The Protean Drive system improves fuel economy, adds torque and power and improves handling in both new and existing vehicles, Protean Electric said on its website.
Another Chinese auto parts manufacturer, Zhejiang VIE Science & Technology Co., invested USD20 million in Protean Holdings in 2016 and set up a joint venture in China. Upon completion of Weifu's investment, Zhejiang VIE's shareholding in the US firm will change to 10.99 percent, per the statement. Protean Electric has developed an in-wheel electric drive system for hybrid, plug-in hybrid and pure electric mid-size vehicles, SUVs, MPVs and light-duty vehicles in China. Protean Holdings established its China headquarters in Tianjin Binhai Hi-Tech Industrial Development Zone in May 2016, the statement added.