Benzinga | Nov 5, 2020 05:52AM EST

Kaixin Auto Holdings Announced Entry into a Binding Term Sheet and Changes to Senior Management; Announced Resignation of CEO, COO

Kaixin Auto Holdings ("Kaixin" or the "Company") (NASDAQ:KXIN) today announced that it entered into a binding term sheet (the "Biding Term Sheet") with Haitaoche Limited (Cayman) ("Haitaoche") on November 3, 2020 and that it has made certain changes to its senior management team.

Binding Term Sheet with Haitaoche

The Binding Term Sheet sets forth the terms and conditions by which Haitaoche will merge with a newly formed wholly-owned subsidiary of Kaixin, with Haitaoche continuing as the surviving entity and a wholly-owned subsidiary of Kaixin (the "Merger").

As consideration for the Merger, Kaixin will issue a number of ordinary shares of Kaixin to the shareholders of Haitaoche (the "Haitaoche Shareholders") so that the Haitaoche Shareholders will collectively hold 51% of Kaixin's share capital upon the closing of the Merger (the "Closing").

Haitaoche is a China-based e-commerce platform for imported automobiles. The manufacture and distribution of automobiles are undergoing significant changes in China, which are expected to create new opportunities and business models. Haitaoche strives to become a leading automobile retail platform in China. In addition to strengthening its imported automobile sales business, it plans to expand into electronic vehicles and other business areas. Haitaoche aims to enter into strategic cooperation agreements with multiple electronic vehicle manufacturers in China and serve a wider group of distributors and consumers.

Pursuant to the Binding Term Sheet, Haitaoche will contribute its vehicle sales business to the Company as part of the Merger. It also intends to contribute other projects to the Company after the Merger.

Kaixin and Haitaoche agree to negotiate in good faith to enter into a definitive agreement with respect to the Merger. The Closing is subject to customary and certain other conditions, including applicable shareholder and regulatory approvals, as well as an undertaking by Haitaoche to ensure certain minimum net asset and cash levels at the Closing.

Upon the Closing, the Haitaoche Shareholders will have the right to appoint a majority of Kaixin's directors. Kaixin's current controlling shareholder, Renren Inc., will have the right to appoint the remaining directors and have veto rights on certain major corporate matters.

Changes to Senior Management

Mr. Chen Ji and Mr. Jinfeng Xie have resigned from their positions as the Company's chief executive officer and chief operating officer, respectively, effective as of November 3, 2020. Meanwhile, the Company's board of directors has appointed Mr. Mingjun Lin, the founder of Haitaoche, as the Company's acting chief executive officer, effective as of November 3, 2020.

Mr. Mingjun Lin has substantial experience in automotive internet media. Prior to founding Haitaoche in 2015, Mr. Lin held senior management positions with TOM Online and Tencent, and he was the founder of SUV.cn, a vertical online media that focused on SUV customer communities.

"On behalf of Kaixin's Board of Directors and management team, I'd like to thank Mr. Ji and Mr. Xie for their contributions to the Company during their service in the management team. We wish them the best in their future endeavors." said Mr. Joseph Chen, Chairman of Kaixin. "I would also like to warmly welcome Mr. Mingjun Lin to the Company. Mr. Lin brings to Kaixin his profound experience in internet and auto retail business. I look forward to working with him and am confident that his strong leadership and deep industry background will make him a tremendous asset to our management team."