Brilliance Auto Introduces the Rocket Capital/Red McCombs Investment Consortium as Strategic Investor

Date : 03/10/2008 @ 1:10PM
Source : PR Newswire (US)

Brilliance Auto Introduces the Rocket Capital/Red McCombs Investment Consortium as Strategic Investor

Brilliance Auto Teams up with Rocket Capital and Red McCombs Automotive to Enter China's Auto Aftermarket Business and Expand Overseas Distribution HONG KONG, March 10 /Xinhua-PRNewswire-FirstCall/ -- Brilliance China Automotive Holdings Limited ("Brilliance Auto" or "the Company"; Stock code: 1114.HK), a leading manufacturer and distributor of sedans, minibuses and automotive components in China, and the Rocket Capital/Red McCombs Investment Consortium ("Rocket Capital/Red McCombs") today signed a memorandum of understanding ("MOU") under which Rocket Capital/Red McCombs will subscribe approximately 10%-15% of the post-issue share capital of the Company's new shares for a total consideration of approximately US$100 million (equivalent to approximately HK$775 million). Rocket Capital Investment ("Rocket Capital") is a private investment platform founded by NBA Houston Rockets owner Mr. Leslie L. Alexander. To realize the full potential of its investment, Rocket Capital has invited leading U.S. auto dealership and aftermarket operator Red McCombs Automotive Group ("Red McCombs") to be a member of the consortium. The investment will significantly enhance Brilliance Auto's capital position and establish a far-reaching partnership with Rocket Capital/Red McCombs. In addition to utilizing the new shared proceeds to expand production capacity for new sedans and Brilliance-BMW products, Rocket Capital/Red McCombs and Brilliance Auto will also form joint ventures ("the JVs") to cultivate auto aftermarket businesses in China and to distribute the Company's products to markets outside of China. Red McCombs, with its deep industry expertise, will play an active role in the business development of the JVs. As a leading U.S. automotive aftermarket group founded by Mr. Billy Joe "Red" McCombs in 1958, Red McCombs has a successful track record of operating auto dealerships and of being one of the first to introduce Japanese and Korean auto brands to the U.S. market. By combining Brilliance Auto's strong brand equity and local expertise with Red McCombs' track record in the auto industry and Rocket Capital's expertise in the international capital markets and consumer sector, the JVs will (i) cultivate opportunities in China's automotive aftermarket, specifically targeting the areas of dealerships, extended warranty, 4-S shops, dealership training, auto finance, used cars sales, auto rental / leasing, auto insurance and internet auto sales, which will have first mover advantage to capture the under-penetrated, high growth Chinese auto aftermarket, and (ii) gain immediate access to the U.S., the world's single largest auto market. Mr. WU Xiaoan, Chairman of Brilliance Auto, said, "This partnership with Rocket Capital and Red McCombs is a strong vote of confidence in the company's business and management as well as our future growth prospect based on our solid performance. The capital expansion will fuel our business initiatives in China, while the JVs development will offer us new revenue and profit growth. The industry expertise, global network, brand building expertise and synergies created from the partnership will give Brilliance new momentum to firmly establish ourselves as a key player in the automobile industry in China and beyond." Mr. Kenneth HUANG, Managing Director and Senior Partner of Rocket Capital, said, "We are excited about our investment in Brilliance Auto which represents the first significant investment undertaken by Rocket Capital in a listed company. The unique deal structure allows us to capture value at both the Brilliance Auto and the JV levels. We are delighted to play an active role in lining up the partnership with Red McCombs which demonstrates our commitment to value creation. We have every confidence that, with our support and Red McCombs' industry expertise, Brilliance Auto will realize its full potential as it enters a new accelerated development phase." Deutsche Bank AG and UBS AG, acting through its business group, UBS Investment Bank are financial advisers to Brilliance Auto and Rocket Capital respectively in the transaction. About Rocket Capital Headquartered in Houston, USA, Rocket Capital is a leading private investment platform founded by NBA Houston Rockets owner Mr. Leslie L. Alexander. Mr. Alexander also owns one of the largest bond trading private accounts on Wall Street. Managed by Mr. Alexander and Mr. Kenneth Huang as well as a professional executive team in the USA, Rocket Capital specializes in investments in emerging markets with a strong focus on the Greater China region. The Company has undertaken investments in the Hong Kong equity market for more than five years. In 2007, it invested approximately US$200 million in Hong Kong's IPO and equity market. Rocket Capital is a cornerstone investor in a number of high-profile Chinese companies including China Railway Group, Sinoma, Uni-President, Xinjiang Xinxin Mining and Anta Sports Products. About Red McCombs Founded by Mr. Billy Joe "Red" McCombs in 1958, Red McCombs owns and operates one of the leading automobile dealerships in the U.S. for over 50 years. Mr. McCombs is a very successful entrepreneur who co-founded Clear Channel Communications, the largest radio station operator and outdoor advertising operator in the world. He was also co-founder of NBA team, the San Antonio Spurs, in 1972. Being one of the largest and most trusted auto groups in the USA, Red McCombs owns retail automobile dealerships and related entities such as insurance, warranty, protective systems and finance. ( http://www.redmccombs.com/ ) About Brilliance Auto Brilliance Auto is one of the leading manufacturers and distributors of sedans, minibuses and automotive components in China. The Group's operating segments are divided primarily into the manufacture of (i) minibuses and automotive components, and (ii) sedans. Its commercial vehicle brands include "JinBei" and "Granse" minibuses and its sedan brand includes "Zhonghua". In 2003, the Group also established a joint venture with BMW to produce BMW 3-series and 5-series sedans in China. The Group is also engaged in the manufacture of gasoline engines for use in minibuses, sedans, SUVs and light trucks and automotive components, including but not limited to window mouldings, strips, axles, stamped parts, etc. To further support its goal to be the leading automotive manufacturer in the PRC, the Group has established strategic partnerships or working relationships with leading global automotive companies, such as Toyota, BMW AG, Mitsubishi, FEV Motorentechnik Gmbh, Porsche and Italdesign S.p.A. For further information, please contact: Hill & Knowlton Asia Ltd. Queenie Mak Tel: +852-2894-6293 / +852-6257-2601 Email: DATASOURCE: Brilliance China Automotive Holdings Limited CONTACT: Queenie Mak, Hill & Knowlton Asia Ltd. +852-2894-6293 / +852- 6257-2601, or Web site: http://www.redmccombs.com/

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