Chinese Yinlong ready to take over Ikarbus and invest over EUR 30 million – First step to talk to banks about debt restructuring, production of electric buses possible as well

The Chinese company Yinlong, the biggest producer of electric buses in the world, is interested in taking over a majority share is the Zemun-based bus factory Ikarbus.

The Chinese company, which produces 60,000 electric buses a year, is prepared to repay all of Ikarbus’ debts, revitalize the existing capacities, but also invest additional money in opening an electric bus production line.

The Chinese investor plans to first recover the existing facilities and keep all the contracts Ikarbus currently has with Mercedes, MAN and other partners. Thank to investments estimated by Yinlong at over EUR 8 million, the production should increase from the current 50 to 200 buses a year, whereas the number of employees should remain the same.

Following that, a new production line, worth around EUR 30 million, would be built, producing electric buses for both the local and the foreign market. Until then, semi-finished buses from a factory in China would be delivered to Ikarbus’ facilities.

Furthermore, as it has been said, a part of the production might be moved from the current location. The Chinese delegation has already visited Sombor and Zastava’s former facilities there, in order to look into their current state and the potential for future investments.

As Yinlong’s representatives say, the negotiations have been carried out since late 2016. They add that they are “very satisfied with the answers given to them in their talks with representatives of the Republic of Serbia”. Because of this, they say, the entire Ikarbus takeover process might be completed within the next six months.

Nevertheless, the arrangement depends on whether Yinlong manages to reach an acceptable agreement with the creditor-banks, as Ikarbus’ current debts amount to around EUR 14 million. The Chinese say that they are ready to repay the debts and start producing as soon as possible. Negotiations with banks about a potential debt reduction, that is, the manner of repayment in the coming period, are to follow.

– The problems with Ikarbus date back to the 1990s, and the Chinese investors want to be provided with an overview of the company’s state, as well as its current debts and receivables. An estimate on the potential increase of the number of employees and the costs thereof is to be prepared within the next 30 days – says Mario Rendulic, president of the Chinese-Southeast European Business Association (CSEBA).

The banks have so far not said anything about potential debt restructuring, Rendulic said and added that “the state is ready to talk to the company and soon present its own conditions, as well as the price”.

– The Chinese are currently offering to buy off Ikarbus’ debts, in exchange for which they would like to have 51% of the company’s assets – Rendulic said and added that, following that, the takeover of the remaining share might be negotiated.

Yinlong, as he says, wants to export its vehicles from Serbia to Europe. As he stated, aside from Ikarbus’, there are no companies in this part of Europe which are able to meet the needs of the Chinese investors in terms of capacities and potentials.

Furthermore, electric buses are already active on a public transport route in Belgrade, and the city also has a developed trolley network, which could be adapted to electric buses relatively quickly.

In the future, in addition to electric buses, Ikarbus’ facilities might produce electric taxis, minibuses and motors as well.

Connie Li, a partner at Yinlong, said that, in addition to Ikarbus’ great potentials, another important reason for their desire to invest in Serbia were the excellent diplomatic and economic relations of the two countries.

– The Chinese state stimulates companies to invest outside the country, and Serbia stands out as a reliable partner in this part of the world. Furthermore, the recent mutual abolition of visas and announcements of the establishment of a direct air route between Belgrade and Beijing also speak in favor of our good relations – Li said, whereas a co-owner of Yinlong, Chu Yingxiong, pointed out that he expected the talks to be completed in a short time, to the satisfaction of both parties.

Milos Vlahovic

Ikarbus a.d. Zemun

Yinlong

Chinese Southeast European Business Association

CSEBA

production of electric buses

production of buses

electric buses

bus factory

Mercedes

MAN

Mario Rendulic

Belgrade public transport

electric buses in Belgrade

Connie Li

Belgrade Beijing flights

Chu Yingxiong