NANJING, China, Sept. 25, 2020 /PR Newswire/ -- China's leading construction machinery manufacturer XCMG (SZ: 000425) has announced the diversification of equity ownership on September 22 in Nanjing, China. This heralds a new chapter since the establishment of XCMG in 1989, as it opens up 49 percent of equity to the market to stimulate market potential and bring new opportunities.
XCMG successfully signed equity transfer agreements totaling 5.4 billion yuan (US$ 791 million) to three state-owned holding enterprises – Jiangsu Guoxin Investment Group Limited, CCB Financial Asset Investment Co., Ltd. and BoCom Financial Assets Investment Co., Ltd., and a total of 15.656-billion-yuan (US$ 2.29 billion) capital increase agreement with 12 strategic investors and employee shareholding platforms.
Included in the capital increase agreement, 435 core team members led by Wang Min, chairman and CEO of XCMG, have contributed 868.5 million yuan (US$127.39 million) for a stake of 2.7183 percent.
"The future of XCMG must be refreshed with new life and opportunities, it is a reform of profound impact and great significance, and we are confident that the new management mechanism will strengthen high-quality development such as core technology R&D to market management," said Wang.
The diversification of equity ownership will bring new changes to XCMG through all levels, including market-oriented re-hiring of management, giving three board seats to 12 strategic investors to ensure checks and balances. XCMG seeks to make more market-centric decisions as well as introducing key employee shareholding and equity incentive plans and implement a profit-sharing plan and market-based compensation mechanism for professional managers, to encourage additional contributions from the technical and management staff.
XCMG is a multinational heavy machinery manufacturing company with a history of 77 years. It currently ranks fourth in the world's construction machinery industry. The company exports to more than 187 countries and regions around the world.
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