China's FAW Xiali Automobile Company earlier this month announced an asset transfer to its parent company in what was reported locally as a move to avoid a de-listing from the main Shenzen stock exchange.
FAW Xiali reported losses of CNY1.66bn in 2013 and CNY480m in 2014. A further year of losses would mean automatic delisting from the exchange, according to local reports.
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The company is transferring assets worth "billions"" of CNY to FAW Group, including its powertrain operations, to raise funds. The local China Merchant Securities is reported as saying, without this asset transfer, the company would be heading for a CNY854m (UUSD133bn) loss in the current calendar year.
FAW Xiali is transferring its engine and gearbox operations, said to be worth around CNY2bn, to its parent company and plans to lease them back at an annual cost of CNY284m.
FAW Group is also said to be taking over FAW Xiali's R&D operations, said to be worth CNY722m.
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