Careplus and GoAuto form JV for EV business expansion - MIDA | Malaysian Investment Development Authority
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Careplus and GoAuto form JV for EV business expansion

Careplus and GoAuto form JV for EV business expansion

02 Jun 2023

Careplus Group Bhd and GoAuto Group Bhd plan to form a joint venture partnership to expand their presence in the electric vehicle (EV) industry.

The collaboration, established through a binding term sheet signed today, aims to explore new business opportunities and develop an EV importation, distribution, assembling, and manufacturing hub.

The initial step in Careplus’ foray into the EV business, the term sheet will be followed by feasibility studies and the subsequent signing of definitive agreements.

GoAuto, known for its involvement in the wholesale and retail of motor vehicles, as well as vehicle maintenance and repair, will join forces with Careplus to establish an EV manufacturing/assembly hub on a 74-acre land in Chembong, Negeri Sembilan.

As part of the collaboration, Careplus intends to explore the acquisition of a 30% equity interest in Intro Synergy Sdn Bhd, a wholly-owned subsidiary of GoAuto.

The acquisition would be facilitated through a share swap arrangement, allowing for the exclusive distribution of Neta EVs in Malaysia.

Additionally, the partnership seeks to establish an EV dealership, leveraging GoAuto’s expertise in the field.

The endeavour is not limited to Neta EVs and aims to expand into the dealership of other EV brands.

The joint venture’s shareholding structure and the roles of each party have been outlined. SPV 2, one of the joint venture companies, will be majority-owned by Careplus (51%), with GoAuto holding the remaining shares (49%).

SPV 3 will have Careplus as a minority shareholder (30%), while GoAuto will hold the majority (70%).

SPV 4 will be primarily controlled by Careplus, with a 70% ownership stake, while GoAuto will hold the remaining 30%.

Under the defined roles, Careplus will be responsible for constructing the manufacturing and assembly hub infrastructure.

It will also appoint a financial controller, provide funding and/or corporate guarantees for Neta EV purchases, and assume full management control over SPV 4.

Meanwhile, GoAuto will lead the establishment of the manufacturing facilities, utilising its technical expertise in the EV industry.

It will spearhead the importation, distribution, and sales of Neta EVs and oversee day-to-day operations.

GoAuto will also contribute its expertise in car dealership, sales, and marketing, aiming to expand the presence of other vehicle brands under SPV 4.

To ensure the viability of the joint venture companies, both parties will engage independent business viability consultants before finalising the execution of joint venture and shareholders agreements.

Careplus views the term sheet as a strategic move towards its long-term ambitions in the renewable energy and energy efficiency management sectors.

It said that by partnering with GoAuto, a reputable player in the EV technology segment, Careplus aims to venture into EV manufacturing and distribution while utilising its existing properties.

The company plans to lease out the currently unutilized Chembong land and Careplus Mall Seremban to support the joint venture and minimise initial investment commitments.

Careplus shares were unchanged at 29.5 today, translating to a market capitalisation of RM171 million.

Source: The Malaysian Reserve