AviChina Industry & Technology, Aviation Industry Corporation of China (AVIC) Tongfei and Hebei Aviation have entered into a joint venture agreement to form Huabei Aircraft, which provides general aviation manufacturing and services.
Huabei Aircraft is expected to have a registered capital of CNY1.5 billion ($238 million), says AviChina, which will contribute 12% of the registered capital at CNY180 million in cash.
AVIC Tongfei will contribute 53% of the registered capital at an aggregate amount of CNY795 million, while Hebei Aviation Investment will contribute 35% of the registered capital at CNY525 million in cash.
AVIC Tongfei will transfer all of AVIC Shijiazhuang's assets to Huabei Aircraft, AviChina adds.
The investment by AviChina will be implemented in two phases. The first phase will have a cash input of CNY100 million by 22 September, and the second phase will have a cash input of CNY80 million by 30 November.
Huabei Aircraft will primarily manufacture general aviation aircraft. The joint venture will also be involved in general aviation operations, while providing services such as airport and aircraft marketing services.
AviChina says that the government's gradual opening of the domestic low-altitude airspace has enabled them to participate in the growing general aviation industry in China through Huabei Aircraft.