NEW YORK (TheStreet) -- Shares of China Auto Logistics (CALI) are spiking by 124.76% to $2.36 on heavy trading volume Tuesday afternoon, after the Tianjin, China-based company announced today that it sold one of its subsidiaries for $62.3 million.
Wuxi Huitong Automobile Sales and Service fully acquired Zhonghe, owner and operator of the Airport International Auto Mall in Tianjin and 40% owner of Tianjin Car King, on June 1 from China Auto Logistics, according to the company.
Approximately $25.8 million will be paid in cash to China Auto Logistic's subsidiary Tianjin Binhai Shisheng Trading and the other $36.5 million will be paid for by Wuxi Huitong. Tianjin Binhai Shisheng must pay off the remainder of its debt, amounting to $5 million, to Zhonghe's former owner before it receives the remaining $36.5 million.
"The timing of our acquisition of the Airport International Auto Mall ahead of the unforeseen persisting downturn in China's economy saddled us with significant costs and losses. Becoming unburdened by these costs opens the door to profitable growth once again going forward," China Auto Logistic's Tong Shiping, CEO, said in a statement.
China Auto Logistics is a provider of automobile sales and trading service and is a web-based automobile sales and trading information platform.
About 5.09 million of the company's shares have changed hands so far today versus its average 30-day volume of 4,658 shares.
Separately, TheStreet Ratings rated China Auto Logistics as a "sell" with a score of D.
This is driven by a number of negative factors. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: CALI
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.