Weichai Power Strips Non-core Assets

Weichai Power Co., Ltd. once again sold a wholly-owned subsidiary of MAT Automotive, Inc. (hereafter referred to as MAT) to dismantle non-core assets.

On January 19, Weichai Power announced that the company’s controlling subsidiary, MAT, had sold 100% of Meneta Holding ApS (hereinafter referred to as Meneta), a wholly-owned subsidiary of MAT, to the natural person Wang Wei at a price of US$7.2 million.

The announcement shows that Weichai Power holds 75% of MAT equity and Wang Wei is another shareholder of MAT, holding 25% of its equity. The payment method for this transaction is that Wang Wei paid US$1.5 million in cash to MAT, and the other 5.7 million US dollars was paid by transferring MAT25% equity held by him.

After the transaction was completed, Weichai Power no longer indirectly holds Meneta, and MAT became a wholly-owned subsidiary of Weichai Power.

The main business of Weichai Power is the R&D, production and sales of high-power high-speed diesel engines and diesel engine components, and through its subsidiaries, it manufactures and sells auto parts for heavy-duty trucks and heavy-duty trucks. Meneta's main business is investment holding.

Weichai Power believes that this transaction is in line with the company's policy of selling non-core assets, which will prompt the company to focus on its core business. In addition, due to Meneta's net loss for the first three quarters of 2008, given the prospects of Meneta's business, the Board of Directors believes that the sale will be beneficial to the future development of the company.

The announcement stated that this transaction will bring a net loss of approximately RMB 36.489 million to Weichai Power, and the cash proceeds of USD 1.5 million from the sale will be used as general working capital of the company.

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