(Yicai Global) April 24 -- One of Volkswagen AG’s China joint ventures is planning to take over the automotive industrial park which was abandoned by embattled conglomerate Leshi Holding Beijing Co. last year.
FAW-Volkswagen Automotive Co. is in talks to acquire the project on Mount Mogan, a popular tourist destination in Zhejiang province, online news outlet Tencent Finance reported, citing an insider at the park. Staff from the China-Germany joint venture have been frequenting the area, but Leshi staff barely show up, the source added.
The park’s owner Leshi Eco-Car Zhejiang Co. won land use rights to the project in 2016 and 2017 after paying CNY420 million (USD66.5 million) for around 1.35 square kilometers of land, which it could use to build a vehicle factory and ecological experience park.
The mountainous terrain required a large amount of blasting work to flatten it out. Leshi carried out most of that work before suspending development in July, when the conglomerate plunged into debt trying to extend its reach into a bunch of different sectors. The new owner will need to finish off the remaining blasting before leveling and excavating the land.
FAW-Volkswagen is one of several firms that have looked into taking over the park, including China’s largest private carmaker Zhejiang Geely Holding Group Co., the largest shareholder in German carmaker Daimler AG and owner of the Volvo car brand. Local government workers have been unable to disclose information on negotiations for confidentiality reasons.