China Eximbank contributes to a $120 million USD syndicated loan to support Shanghai Highly's acquisition of 60% of the equity of Magneti Marelli (Hong Kong) Holdings Co., Ltd.

Project narrative

On January 27, 2021, a two-bank syndicate of the Shanghai Branch of the Export-Import Bank of China (as lead bank) and the Shanghai Branch of the Bank of China (BOC) entered into a $120 million USD syndicated overseas investment and acquisition loan agreement with Highly International (Hong Kong) Limited — a Hong Kong-incorporated wholly-subsidiary of Chinese air conditioner compressor manufacturer Shanghai Highly (Group) Co., Ltd. that was publicly traded on the Shanghai Stock Exchange but with Shanghai Electric (Group) Corporation (later renamed to Shanghai Electric Holding Group Co., Ltd.) as its largest shareholder (26.12% stake in 2021) — to finance its acquisition of 60% of the equity of Magneti Marelli (Hong Kong) Holdings Co., Ltd., a special purpose vehicle established to spin off and restructure the automotive air-conditioning compressor and air-conditioning system business of Marelli Corporation K.K. The loan was secured by (i.e. collateralized against) Highly International's 60% equity stake in Magneti Marelli (Hong Kong) Holdings Co., Ltd,. Record ID#109607 captures China Eximbank's contribution. Record ID#109916 captures BOC's contribution. The proceeds were to be used to acquire 60% of the equity of Magneti Marelli (Hong Kong) Holdings Co., Ltd., a special purpose vehicle established by Marelli to spin off and restructure the automotive air-conditioning compressor and air-conditioning system business. On September 7, 2020, Highly International (Hong Kong) Limited signed an agreement with Marelli Corporation to purchase a 60% stake in its compressors and heating, ventilation and air conditioning (HVAC) and electric driven compressor (EDC) systems for a consideration of $202,900,461 USD. Marelli would establish Highly Marelli Holdings Co., Ltd. to be composed of Marelli's relevant compressors and HVAC business unit, which had sales revenue of ¥90 billion JPY ($857 million USD) in 2019. Highly Marelli Holdings would run those businesses, with 4,275 employees based in Japan, China, and broader Asia, Europe, and North America, currently within Marelli's compressors and HVAC business to be transferred to Highly Marelli Holdings. Highly Marelli Holdings would run as joint venture between Marelli and Highly and would be registered in Hong Kong and have its operational headquarters in both Shanghai, China and in Saitama, Japan, alongside Marelli’s global headquarters. Highly Marelli Holdings would have an enterprise value on a debt free/cash free basis of $304.4 million USD. The acquisition was expected to give Marelli further access to the Chinese market and facilitate more investment in electrification technologies and give greater synergies. Highly Marelli would set a goal of developing, manufacturing, and selling automotive air conditioning systems and integrated solutions for the thermal management system for new energy vehicles. The acquisition had a legal closing date at the beginning of January 2021. The acquisition was completed on January 28, 2021. The loan was repaid in 2024.