Chinese automaker Geely has pulled out as the majority shareholder in its premium electric car brand Zeekr, potentially paving the way for the brand to be independently financed.
When Zeekr was launched earlier this year, it was 51 percent owned by Geely Auto Group and 49 percent by Geely Holding Group.
According to data provider Tianyancha, Zeekr is now wholly owned by Shanghai Huapu Guorun Automotive Co.
It is worth noting that Value Century, a wholly-owned subsidiary of Geely Auto, is the de facto controller of Huapu, holding 91 percent of the latter's equity.
Geely's move may be intended to pave the way for Zeekr to join the introduction of external financing.
On June 25, Hong Kong-listed Geely made two announcements, saying it was withdrawing plans to list on China's Nasdaq-style sci-tech innovation board, also known as the STAR market, and had decided to let Zeekr bring in outside capital.
Commenting on the move, China Merchants Securities (Hong Kong) said Zeekr's plan to raise independent financing would accelerate the development of its smart electric business and facilitate Geely's valuation release.
Geely launched a plan to list on the STAR market in the second half of 2020 to raise RMB 20 billion ($3brillion) for new models and forward-looking technology development and industrial acquisitions.
However, the regulatory environment in China has since changed, making the timing of the IPO highly uncertain. So Geely withdrew its application for listing on the KCI and explored external financing for Zeekr.
China Merchants Securities believes that it is a reasonable strategy for Geely's management to give up listing in the short term, and the decision to withdraw the A-share listing application in due course can be more flexible and proactive to continue to promote capital operation in other channels.
"With the current rapid development of the smart electric vehicle industry, it would be more than worthwhile to delay Zeekr's independent financing development because of the A-share listing," the team wrote.