C Gogreen (HKG:0397) to buy stocks in auto power biz at $272M


China Gogreen Assets Investment (HKG:0397), GCL Energy Storage Technology Holdings Inc. (the Target) and GCL Energy Storage Technology Holdings (BVI) Limited have entered into a memorandum pursuant to which China Gogreen will purchase shares representing 18.41% of the issued share capital of the Target for HK$82.08 million, China Gogreen announced.

The acquisition consideration will be satisfied by China Gogreen allotting and issuing 1.44 billion consideration shares at the issue price of HK$0.057 per consideration share. The consideration shares will be subject to lock-up for a period of one year after allotment.

Subject to fulfillment or waiver of all the conditions precedent as set out in the definitive agreement, China Gogreen will subscribe for such number of new shares in the capital of the Target so that together with the acquired shares, China Gogreen will hold 42.8% of the enlarged issued share capital of the Target at completion of the transactions.

The subscription money payable by the company for the subscription shares will be HK$190 million. Such subscription money will be satisfied by the internal resources of China Gogreen and/or by equity fund raising exercise to be undertaken by China Gogreenand/or by bank borrowings. The issue price per share of China Gogreen under any such equity issue will be the same as the price at which the consideration shares are to be
issued (i.e. HK$0.057).

The Target group is engaged in the research and development and production of storage battery system and battery materials, mainly for the use in auto power industry. The group is managing a 30MWh battery production facility and research and development centre in Changzhou city in Jiangsu Province of China, and is ramping up the production capacity of battery materials in its facility in Yan Cheng city in Jiangsu Province of China. The directors consider that the transactions will provide an opportunity for China Gogreen to tap the auto power and storage battery system industry, and thereby enhancing China Gogreen's future financial performance and profitability.

Parties to the memorandum will complete negotiation and finalise definitive agreement within 60 days from the date of the memorandum. During the period, China Gogreen will be granted exclusive rights on negotiation.



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