Chijet Motor Company, Inc. has entered into a business combination agreement with Deep Medicine Acquisition Corp.
Deep Medicine Acquisition Corp. (NASDAQ: DMAQ), a publicly traded special purpose acquisition company, today announced the signing of a definitive business combination agreement, dated July 12, 2022, with Chijet Motor Company, Inc., a leading Chinese automaker, which is developing next-generation electric vehicles and expanding its manufacturing capabilities. Chijet expects to use the transaction proceeds to fund the development and production of its planned next-generation electric vehicle, with sales expected to increase as new models are launched and two production facilities, occupying a total area of 8.47 million square feet with annual production capacity of 200,000 vehicles currently under construction in Xiangyang and Yantai, China, are completed.
The primary business of Chijet is the development, manufacture, sales and service of traditional fuel vehicles and electric vehicles. State-of-the-art manufacturing systems and stable supply chain management enable the company to provide consumers with products of high performance at reasonable prices. The factory in Yantai, China, will be dedicated to EV production, and the company’s headquarters will be also located at the planned Yantai factory. Chijet has a management team of industry veterans with decades of experience in engineering and design, management, financing, industrial production and financial management.
The business combination attributes an implied enterprise value to Chijet’s operating companies of $2.55 billion in the aggregate, including Chijet’s 85.17% ownership interest in Shandong Baoya New Energy Vehicle Co., Ltd., the Chinese company that is developing new EV models, and 64.82% interest in FAW Jilin, the Chinese company producing and selling traditional fuel vehicles. Upon completion of the transaction, Chijet is expected to have approximately $127.8 million in cash, assuming no redemptions by DMAQ public shareholders. The cash proceeds raised in the transaction are currently anticipated to be used for the construction of Chijet’s Yantai electric vehicle manufacturing base and to fund company operations, support its growth and for general company operating purposes. Following completion of the proposed transaction, Chijet plans to raise additional capital to further its planned expansion of production capacity and product offering to include new models of electric vehicles.
In the proposed transaction, both Chijet and DMAQ will be acquired by a newly-formed holding company named Chijet Motor Company, Inc., which is expected to be listed on the Nasdaq Stock Market (“Nasdaq”).
The boards of directors of DMAQ and Chijet have unanimously approved the proposed transaction.The transaction is expected to close by the end of the fourth quarter of 2022, subject to shareholder approval and other customary closing conditions.Read more