China Yuchai International Limited (CYD) ("China Yuchai") a leading manufacturer and distributor of engines for on- and off-road applications in China through its main operating subsidiary, Guangxi Yuchai Machinery Company Limited ("GYMCL"), wishes to announce that three new investors have committed funds to help expand the future development and operations of GYMCL's subsidiary, Yuchai Xin-Lan New Energy Power Technology Co., Ltd. ("Yuchai Xin-Lan"). These investors are unrelated parties.
Yuchai Xin-Lan was incorporated in August 2021 and GYMCL invested a total value of RMB 500 million into the new subsidiary. It was established to research, develop and construct new production capacity for GYMCL's new energy technologies including fuel cell systems, range extenders, hybrid power, electric drive system, etc. Yuchai Xin-Lan has successfully integrated an electric drive axle for the first time into an EV light-duty bus which is currently being sold in the bus market. Its high-power range extender powertrain systems have been introduced into smart mining trucks, and its gas-electric hybrid engines are propelling 10-meter buses.
In November 2022, Yuchai Xin-Lan received a capital contribution of RMB 50 million from the Nanning Industrial Investment New Energy Automobile Investment Company, which is an NEV-related investment company of the Government of Nanning Municipality. In January 2023, to further meet the high capital demand of Yuchai Xin-Lan, two new investors, Guangxi Guangtou Incubation Investment Fund and GIIT Investment Development Company, have also agreed to contribute a total of RMB 20 million capital into Yuchai Xin-Lan. As at the date of this announcement, Yuchai Xin-Lan has received the amount of RMB 10 million and it expects the remaining RMB 10 million to be received subsequently.
Upon receipt of the full RMB 70 million capital contribution, Yuchai Xin-Lan would become an 87.7%-owned subsidiary of GYMCL. Based on the subscription agreements entered into between GYMCL, Yuchai Xin-Lan and the three investors, these investors have the right to require that GYMCL buys back their respective Yuchai Xin-Lan equities at cost plus agreed interests if certain conditions are not being met by end of 2027.
The new capital raised will be used mainly as additional working capital and for investment in further development of high-power, full-electric drive systems, and for hybrid and range extender drive systems for both on-road and off-road applications.