China Gogreen Assets Investment Limited (HKG:0397) (CGAI) announced that it has agreed to purchase 12.91% of the enlarged issued share capital of target company GCL Energy Storage Technology Holdings Inc. at a consideration of HK$82.08 million, which will be satisfied by CGAI allotting and issuing 1.44 billion consideration shares at the issue price of HK$0.057 per consideration share.

CGAI has also agreed to subscribe for 29.89% of the enlarged issued share capital of the target for the subscription price of HK$190 million. The full subscription price will be satisfied by the internal resources of CGAI and/or by equity fund raising exercise to be undertaken by CGAI and/or by bank borrowings.

The target is engaged in the research and development and production of storage battery systems and battery materials, mainly for use in the auto power industry. The target manages a 30 MWh battery production facility and research and development centre in Changzhou City in Jiangsu Province, and is ramping up the production capacity of battery materials in its facility in Yancheng City in Jiangsu Province.

The directors consider that the transactions and the partial subscription will provide an opportunity for CGAI to tap the auto power and storage battery system industry, and thereby enhancing CGAI’s future financial performance and profitability.

The acquisition and the full subscription are inter-conditional. Immediately after the full completion, CGAI will hold 42.8% of the enlarged issued share capital of the target.

The 1.44 billion consideration shares represent 18.58% of the enlarged issued share capital of CGAI. The issue price of HK$0.057 per consideration share represents a discount of approximately 32.14% to the closing price of HK$0.084 per share yesterday.

Source:chinesestock.org