Legend transfers CAR shares to PE-backed Ucar

According to a regulatory filing, a total of 125 million CAR shares were transferred to Ucar at HK$13.5 apiece, which represented about an 8% premium over the average closing price in the last 30 days. Legend's stake in CAR has fallen to 23.7% from 29% and Ucar now owns  5.28% of CAR.

Last month, Ucar raised a further $550 million from Warburg Pincus, Legend and CAR. The round followed a $250 million Series A round raised in July. The listed company, which is also backed by Warburg Pincus, holds a 9.85% stake in Ucar.

CAR has a longstanding relationship with Ucar. The wife of Charles Lu, chairman and CEO of CAR, holds a 22.4% stake in the company through Haode Investment. Eastrock Capital Partners Fund I, which is 38%-owned by Lu's nephew, has a 24% interest in Ucar. Haode also has a 12.89% stake in CAR.

CAR entered into a co-branding arrangement with Ucar earlier this year, enabling the smaller company to rent its high-end vehicles.

As of the end of June, CAR had a total fleet of 84,719 company-owned cars and was the largest car rental provider in China in terms of fleet size, revenue and network coverage. Ucar was renting 16,136 vehicles from CAR under long-term contracts, which accounted for about 19% of CAR's total fleet, and providing car rental services through its mobile app. 

China's Ministry of Transport released a draft of its proposed online chauffeured car service regulation over the weekend. The document lays down a regulatory framework for service providers, vehicles and drivers operating in the online chauffeured car services industry. For example, privately-owned vehicles cannot be used to provide chauffeured car services, while drivers and vehicles should be certified by local governments in order to provide such services. 

Ucar operates leased vehicles from CAR and employs professional drivers, an operational model that is already in line with the proposed regulations, according to Moody's Investors Service.

CAR received backing from Legend Capital in 2010 and the following year Legend Holdings made a strategic investment of approximately RMB207.8 million. Warburg Pincus committed $200 million to CAR in 2012 and Hertz subsequently came in with a $100 million investment. CAR raised $467 million through its Hong Kong IPO in September 2014.

Last month, Hertz sold 60 million shares, or 2.5% stake, in CAR at HK$13.01 apiece. Its holding fell to 13.6%. Warburg Pincus owns 11.1% of CAR, having made a partial exit in May. Lu has a 14.7% stake in the company.

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• Topics
• Greater China
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• Legend Capital
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• Warburg Pincus Asia
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