Geely cars are displayed at the Shanghai Auto Show in Shanghai on April 17, 2019. File photo: AFP

Chinese automaker Geely Automobile Holdings will establish an indirect wholly foreign-owned enterprise with its parent company Geely Holding, by forming a Joint Venture (JV) company in China, according to a company official statement on Tuesday.

Geely Automobile Holdings said in the statement that the company and Geely Holding agreed to form a JV company on March 23 to establish an indirect wholly foreign-owned enterprise in China, noting that the enterprise will engage in the research, development, purchase and sale of the electric mobility related products, including the intelligent electric vehicles under the new Zeekr brand. 

The JV Company will issue 2 billion JV shares, according to the statement, Geely Automobile Holdings and Geely Holding will make capital contribution of 2 billion yuan ($307.23 million) in total and subscribe for 51 percent and 49 percent of the total JV shares, respectively.  

Bloomberg reported on Tuesday that Geely Automobile Holdings' plan to list on Shanghai's STAR board hit a snag, adding that the stock market regulator questioned if the company is high-tech enough for the bourse. 

Yang Xueliang, vice president of Geely Auto Group responded that the company did not have any further information to disclose at the moment regarding the planned IPO and everything would be subject to regulatory approval.

Geely Automobile Holdings' revenue reached 92.11 billion yuan ($14.15 billion) in 2020, dropping 5 percent from the previous year, according a statement released by the company. Moving forward, the sales target for 2021 was set at 1.53 million units, which represented an increase of 16 percent from 2020. 

Global Times