BAIC Motor (01958) has announced that after trading hours on October 21, 2026, Beijing Hyundai Motor Finance Co., Ltd. (BAIC Hyundai Finance), Beijing Automobile Investment Co., Ltd. (BAIC Investment, a non-wholly-owned subsidiary of the company), Beijing Hyundai Motor Co., Ltd. (Beijing Hyundai), Hyundai Capital Services, Inc. (Hyundai Finance) and Hyundai Motor Company (Hyundai Motor) entered into a capital reduction agreement.

Under the agreement, the parties agreed that: (i) BAIC Investment will exit its entire equity interest in BAIC Hyundai Finance by reducing its registered capital in BAIC Hyundai Finance (in an amount equivalent to BAIC Investment's capital contribution), representing 33% of BAIC Hyundai Finance's total registered capital, for a consideration of RMB 2.208 billion payable by BAIC Hyundai Finance to BAIC Investment (the exit); and (ii) Beijing Hyundai will exit its entire equity interest in BAIC Hyundai Finance by reducing its registered capital in BAIC Hyundai Finance (in an amount equivalent to Beijing Hyundai's capital contribution), representing 14% of BAIC Hyundai Finance's total registered capital, for a consideration of RMB 937 million payable by BAIC Hyundai Finance to Beijing Hyundai.

Immediately before the capital reduction, BAIC Hyundai Finance was an associate of the company and was held as to approximately 46% by Hyundai Finance, an independent third party of the company; approximately 33% by BAIC Investment, a non-wholly-owned subsidiary of the company; approximately 14% by Beijing Hyundai, which is jointly invested by BAIC Investment and Hyundai Motor, each contributing 50% of its registered capital; and approximately 7% by Hyundai Motor, an independent third party of the company.

Upon completion of the capital reduction, neither BAIC Investment nor Beijing Hyundai will remain a shareholder of BAIC Hyundai Finance. The exit is intended to further optimize the group's asset structure, improve capital utilization efficiency and overall return on assets, and is consistent with the group's long-term development strategy.

After careful assessment, the board considers that the pricing of this transaction is fair and the terms are reasonable, consistent with the commercial interests of the group and the overall interests of the group and all shareholders. Through the exit, the group will recover funds to support its business development.