Picture and press release: EHang
EHang has announced a strategic partnership with Qingdao West Coast New Area, one of China’s national new areas in Shandong province. The press release states that this partnership comes with a binding US$10,000,000 equity investment and a potential additional investment of US$10,000,000 in the future.
EHang aims to use this partnership to develop its AAV business and the urban air mobility industry and market in Qingdao. The company has also planned to establish a Northeast Asia regional headquarters as well as a national firefighting business centre in Qingdao West Coast New Area.
Qingdao West Coast New Area’s investment arm will initially invest a total of US$10,000,000 in the Company through a private placement of newly issued Class A ordinary shares of the Company, said the press release.
The company said that the purchase price for each Class A ordinary share is calculated based on the average of the closing sales prices of the Company’s American depositary shares (“ADS”) for the 30 trading days immediately preceding the signing of the share subscription agreement on December 21, 2022. Each ADS represents two Class A ordinary shares of the Company. The Company intends to use the proceeds for its working capital and general corporate purposes.
The private placement is expected to close in the first quarter of 2023 subject to the receipt of certain investment-related regulatory approvals and clearances in China and the satisfaction of other customary closing conditions.
“EHang is a global leader in the eVTOL sector ranging from hardware to software. Its AAV products and fleet operations are fully in line with Qingdao’s development requirements for smart, eco-friendly and highly efficient UAM solutions. We believe it will be a ‘win-win’ cooperation with our joint efforts to advance high-end industries and aviation sectors in Qingdao and to create a beneficial UAM industrial ecosystem,” said Guilong Shi, Deputy Director of the Administrative Committee of Qingdao West Coast New Area.
Pending the closing of the private placement, the investor has made available to the Company the RMB equivalent of the purchase price as interim funding at no cost, and the Company intends to use such funds for its working capital and general corporate purposes until closing.
Xin Fang, Chief Operating Officer of EHang, commented, “This strategic investment and business partnership is a significant milestone for EHang’s long-term growth. With more funding and strong product demands in the Qingdao local market, which is estimated to reach the level of RMB100 million in two years, EHang expects to accelerate the development of Qingdao’s AAV industry through new aviation business and low-altitude economy. We believe our cooperation will propel Qingdao to be a world-class, innovative UAM application demonstration area with comprehensive AAV industrial chains and commercial operations.”