(Yicai) Aug. 8 -- Due to slower-than-expected progress with the initial public offering of Chinese carmaker GAC Group's new energy vehicle unit GAC Aion, an investment fund that took part in its A-round fundraiser is facing a sell-off by its limited partner.

China Cinda Asset Management, a state-owned bad assets manager, recently released a statement through the Beijing Equity Exchange about its plan to sell equity in GAC Aion, but the investment document was subsequently pulled. Its withdrawal, an unusual move, has drawn a lot of market interest.

Beijing-based Cinda is a limited partner of Yingke Private Equity, a minority shareholder in GAC Aion, and Cinda is selling its stake in Yingke, rather than directly selling shares in GAC Aion, an insider familiar with the matter told Yicai today, adding that the statement was withdrawn at the request of GAC Aion.

The stalled progress of GAC Aion’s IPO lies behind the sale, the person said.

Yingke is one of 53 investors that participated in GAC Aion’s Series-A funding in October 2022. The investors spent CNY18.3 billion (USD2.6 billion) to acquire 17.7 percent of GAC Aion, which at the time was a new record for a single round of private equity financing in China’s new energy vehicle sector. 

“Originally, Cinda predicted that GAC Aion would complete its initial public offering within two years, but that has now been postponed,” the insider said. “This led to the decision to dispose of the relevant assets.”

According to market rumors, GAC Aion planned to go public on Shanghai’s Nasdaq-style Star Market, but the listing has now been shifted to the Hong Kong Stock Exchange, partly because of regulatory changes in the Chinese mainland. 

Amid the launch of new rules for the capital market, the China Securities Regulatory Commission temporarily halted reviews of new offerings in the first half of this year. As a result, only 44 new stocks succeeded in listing in the mainland during the first six months, raising CNY32.5 billion (USD4.5 billion). That represented slumps of 75 percent and 85 percent respectively, from a year ago. 

As well as its IPO problems, GAC Aion has faced pressure in its operating performance. The Guangzhou-based EV maker said it sold 126,329 vehicles in the first six months, down 40 percent from the same period of last year.

Editors: Dou Shicong, Tom Litting