(JW Insights) Oct 13 -- Chinese auto parts supplier Xiling Power Science & Technology (西菱动力) said it has penned a deal with an investment group in the United Arab Emirates to build a factory in China, reported Yicai Global on October 12.

Xiling Power and Abu Dhabi-based Bin Omeir Holding Group will spend RMB700 million ($96 million) to set up a new energy vehicle parts factory with an annual output of 2 million NEV subframes and 500,000 electric scroll compressors, the firm announced on October 11. The two parties signed deal on October 9.

Xiling Power will hold an 80 percent stake in the joint venture plant, investing technologies and cash, while Bin Omeir will provide funds to hold the rest. The two companies will also build a JV factory in the Middle East after the first plant makes substantial progress, with preferred locations being the UAE, Saudi Arabia, and Qatar, said the Yicai Global report.

The Middle Eastern factory is expected to have a registered capital of $100 million, with Bin Omeir investing cash to gain an 80 percent stake and Xiling Power holding the rest after providing technologies, according to the agreement. Its products will be decided based on local demand.

Bin Omeir also plans to become a shareholder in Xiling Power via a private placement of shares and further its partnership with the Chinese firm as a strategic investor.

Founded in 1999 and listed on the Shenzhen Stock Exchange in 2018, Xiling Power is based in Chengdu, southwestern China's Sichuan Province.

Bin Omeir owns Autostrad Rent a Car, one of the largest car rental service providers in the UAE and the Middle East, and was a dealer of France's Peugeot and South Korea's Kia. On October 10, Arcfox, a premium electric car brand owned by China's BAIC Group, said it would partner with Bin Omeir to expand in the UAE and Saudi Arabia, according to the Yicai Global report.

(Li PP)