Ann: Quarterly Activities and Cashflow Report, page-90

Huayou just released their announcement, mainly:

1. Huayou CNY3.2b (AUD$667m) acquires 100% of Bamo-Tech (its main customers: CATL, BYD, LISHEN, Samsung and LG) by issuing shares at 90% of last 120-day share price average and shares will be on escrow between 12 - 36 months.

2. Huayou to purchase 15.68% stake in Huayou Quzhou, become 100% owner, by issuing shares at same term.

3. To raise up to CNY3.2b (AUD$667m) cash from 10 or less 10 selected investors at not less than 90% of 20 day share price average, shares will be on escrow for 12 months. CNY2.1b for high energy density power lithium ion battery material industrialization advanced intelligent manufacturing; CNY1b (AUD$208m) for WORKING CAPITAL.

4. Further CNY990m is raised by Huayou New Energy, introducing third-party investors, including CITIC Securities, Guoxin Central Enterprise, Jiangsu Spruce Capital, and Guangzhou Yuexiu Fund.


It appears Huayou has taken this opportunity to raise additional cash AUD$208m as Buffer.

GLTAH.



Huayou Cobalt is brewing around lithium battery materials. Introducing star investors + acquiring CATL’s client-Bamo Tech

2019-04-19 22:45 Source: Securities Times ·
Company Author: Ruanrun Sheng

Around the new energy lithium battery industry, Huayou Cobalt (603799), one of the leading A-share cobalt companies, started to introduce third-party investors on the one hand, and planned related asset restructuring on the other hand. The company's stock will resume trading on April 22nd.

Subsidiary introduces star investors

As an important platform for the development of new energy lithium-ion materials industry of listed companies, Huayou New Energy will usher in capital increase and introduce third-party investors, including CITIC Securities, Guoxin Central Enterprise, Jiangsu Spruce Capital, and Guangzhou Yuexiu Fund.

Specifically, according to the Capital Increase and Share Expansion Agreement, Huayou Cobalt agreed to increase the registered capital of Huayou Energy from 596 million yuan to 700 million yuan. The newly added registered capital will be subscribed by Huayou Cobalt. The stock was 41.4201%, which was still the actual controller of Huayou New Energy; in addition, other investors increased the total amount of funds by 990 million yuan.

The listed company said that Huayou New Energy Holdings or the participation in the new energy lithium battery project is an important measure for the company to transform and upgrade the new energy lithium battery industry. This time, the introduction of other investors to increase the capital of Huayou New Energy is of great significance for the smooth development of related lithium-ion materials projects and the creation of an internationally competitive lithium-ion new energy materials industry chain.

The reporter of e company noticed that in April last year, Huayou Cobalt Co., Ltd. and LG Chemical Co., Ltd. of Korea Co., Ltd. established Huajin New Energy Materials (Chuzhou) Co., Ltd. and Leyou New Energy Materials (Wuxi) Co., Ltd. (hereinafter referred to as Leyou New Energy). ), responsible for the production of lithium ternary precursors and ternary cathode materials, to complement the lithium battery ternary cathode material to fill the "short board." The newly-increased Huayou New Energy is holding a 51% stake in Huajin New Energy Materials (Zhangzhou).

Huayou Cobalt also introduced in the annual report that last year, the company's joint venture with POSCO and LG Chemical in Changzhou, Tongxiang, Wuxi and other places of positive electrode materials and ternary precursor projects were fully rolled out, the company's shareholding industry fund project Huahai New Energy The first-phase production line of the ternary precursor was completed and put into operation, the second-phase production line started construction, new projects such as battery-grade lithium carbonate were started, and the expansion projects such as cobalt sulfate and extraction of 30,000 tons of cobalt capacity were completed. Huayou Luzhou succeeded. The list of the first batch of enterprises selected by the Ministry of Industry and Information Technology for the "Standard Conditions for the Comprehensive Utilization of Waste Energy and Battery for New Energy Vehicles" has created favorable conditions for the development of the recycling market for used power batteries.

Restructuring related party assets

In addition to the introduction of third-party investors to develop new energy lithium battery materials projects, Huayou Cobalt also announced plans to purchase 3.2 billion yuan to purchase the entire share capital of Bamo Technology and 862 million yuan to purchase 15.68% stake in Huayou Quzhou; listed companies will be in accordance with 32.24 yuan / The share issuance of shares, the two companies will be wholly owned after the transaction is completed.

From the perspective of equity relationship, Bamo Technology is a subsidiary of Huayou Holdings, one of the controlling shareholders of the listed company, and Huayou Cangzhou is a holding subsidiary of the listed company. Therefore, this transaction constitutes a transaction. In addition, regardless of supporting financing, Xie Weitong and Chen Xuehua will hold a total of 36.58% after the completion of the transaction, which will still be the actual control of the company.

At the same time, Huayou Cobalt intends to use the inquiry method to non-publicly issue shares to no more than 10 specific investors, and the total amount of matching funds raised shall not exceed RMB 3.2 billion for “high energy density power lithium ion battery material industrialization advanced intelligent manufacturing. The project”, the listed company supplements the working capital, pays the transaction agency fee and related taxes and fees.

According to reports, Bamo Technology was established in 2002, and has long been committed to the research and development and production of lithium battery cathode materials. Customers include CATL, Ningde New Energy, BYD and Lishen, as well as well-known overseas customers such as Samsung and LG. It is already a major supplier of domestic power battery cathode materials; in particular, it has a strong competitive advantage in the field of high energy density power lithium battery cathode material supply.

According to the performance commitment period, the net profit attributable to the shareholders of the parent company after the deduction of non-recurring gains and losses from Bamo Technology in 2019, 2020 and 2021 is not less than 215 million yuan, 280 million yuan and 363 million yuan respectively.

Huayou Cobalt pointed out that the listed company's products cover the most important raw material varieties for the production of lithium battery cathode materials such as cobalt trioxide and ternary precursors. Prior to this transaction, the listed company and Bamo Technology had a relationship with suppliers and customers. The two parties worked closely for many years and established a good cooperative relationship.

Through this transaction, the target company will become a wholly-owned subsidiary of the listed company, and the listed company will further strengthen its layout in the field of lithium battery cathode materials. Bamo Technology can obtain a stable supply of raw materials and reduce the operational risks caused by fluctuations in raw materials.


Official announcement:
http://pdf.dfcfw.com/pdf/H2_AN201904191320931973_1.pdf
http://company.stcn.com/2019/0419/15034867.shtml