US-listed Kaixin Auto Holdings (KXIN.US) today announced the signing of a binding letter of intent to invest and a management restructuring with Haitaoche Limited on November 3.
Under the agreement, Haitaoche will be merged with a newly established wholly-owned subsidiary of Kaixin Auto. After the merger, Haitaoche will continue to exist and become a wholly-owned subsidiary of Kaixin Auto.
Kaixin Auto will issue a number of shares of the Company's common stock to the shareholders of Haitaoche. Upon completion of the merger, the shareholders of Haitaoche will hold 51% of the share capital of Kaixin Auto and will have the right to appoint a majority of the directors of Kaixin Auto.
Renren (RENN.US), the current controlling shareholder of Kaixin Auto, will have the right to appoint the remaining directors and will have veto power on certain major corporate matters.
In terms of personnel changes, Kaixin Auto said that Chen Ji and Jinfeng Xie have resigned as CEO and COO of the company, respectively.
Meanwhile, the board of directors has appointed Haitaoche founder Mingjun Lin as acting chief executive officer, effective November 3.
Kaixin Auto was up 70 percent in pre-market trading.
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