Kelu Electronics intends to acquire 65 % of Tengyuan Cobalt's shares and will resume trading.

Kelu Electronics announced on May 4 that the company has signed the "Acquisition of Tengyuan Cobalt New Materials Co., Ltd." with the partners Luojie, Xiefubiao, and Wuyanghong(the three are consistent operators). The intentionality agreement of controlling shares of Tengyuan Cobalt New Materials Co., Ltd. is intended to acquire the 65.57 % controlling shares of Tengyuan Cobalt, which it holds in total. It is worth mentioning that Tengyuan Cobalt intends to be listed on the Shenzhen Stock Exchange's small and medium-sized IPO and has updated its prospectus in January 2018.

The announcement shows that Tengyuan Cobalt's business scope includes the processing and sales of cobalt, nickel, copper, manganese, and gypsum, and its 100 % stake is estimated to be 3.9 billion yuan. If this is measured, the estimated valuation of 65.57 % of the equity is 2.557 billion yuan.

According to financial data, as of June 30, 2017, Tengyuan Cobalt's total assets were 1.093 billion yuan and shareholders 'equity totaled 668 million yuan; The total operating income from January to June 2017 and 2016 were 831 million yuan and 622 million yuan, respectively, and the corresponding net profits were 274 million yuan and 503.869 million yuan, respectively.

According to the prospectus, Tengyuan Cobalt is one of the most competitive cobalt salt manufacturers in China. The core products are cobalt salts such as cobalt chloride and cobalt sulfate, and cobalt oxides such as cobalt tetroxide. The above products are the main sources of profits. Due to the characteristics of copper and cobalt, Tengyuan Cobalt also produces electrodeposited copper.

At present, Tengyuan Cobalt has 6 invention patents and 17 utility model patents. It has a strong technical advantage in wet smelting of cobalt products, and has independently planned, designed, and manufactured major wet smelting production lines. Cobalt is widely used inspecial, electronics, machinery manufacturing, automobiles, chemicals, new energy, high-end equipment and other fields because of its unique performance.

Since 2015, Kelu Electronics has participated in the capital operations of a number of companies such as Guoneng Battery, Zhongdian Green Source, Ground Rail Car Rental, and Kanai New Energy through capital increase, transfer, acquisition of equity, and joint investment. The business also expanded from the traditional smart grid field to integrated energy management and services, energy storage services, power batteries and other fields.

Kelu Electronics said that the transaction will be conducted in the form of a combination of cash and issuance of shares. Currently, the company is negotiating and negotiating with the counterparty on the specific details of the relevant agreement. The company's shares will resume trading on May 4, 2018. The company will continue to advance this major asset restructuring after the stock resumption.

The page contains the contents of the machine translation.