Jia Rui International (822.HK) announced that on December 23, 2024, the seller (an indirect wholly-owned subsidiary of the company) entered into an equity transfer agreement with the buyer, pursuant to which the seller agreed to sell and the buyer agreed to acquire equity (representing 40% of the equity interest in the target company, Jia Magnesium New Material Technology (Yulin) Co., Ltd.) for a total cash consideration of 10 million yuan.
The target company is a limited liability company established in China on September 18, 2021, and as of the date of this announcement, it is wholly owned by the seller and Jia Rui Metals. The target company is primarily engaged in the sales and production of metal materials.
The group is expected to generate net proceeds of approximately 9.9 million yuan from the disposal, which it intends to use as general working capital.
The board of directors of Jia Rui International believes that introducing a new investor will bring various benefits to the group. Given the background of Mr. Zhang (the ultimate beneficial owner of the buyer) and his extensive business network and connections, the group may explore new business cooperation opportunities in this field. With Mr. Zhang's experience and network, the group is confident in enhancing the operational efficiency of the target company and enriching its product portfolio. In particular, the board of directors of Jia Rui International believes that with Mr. Zhang's connections, the production cost of its magnesium alloy materials can be reduced, production efficiency can be improved, and the overall competitiveness of its products can be comprehensively enhanced. Jia Rui International Group also intends to participate in a new project through the target company (involving the production of 50,000 mt of new-type magnesium alloy materials and 10 million units of new-type lightweight components for automobiles). This project may require the introduction of suppliers and new production processes through cooperation with Mr. Zhang's industry connections. Jia Rui International Group is currently negotiating the terms of such new investments with the relevant contracting parties, and no binding agreement has been reached in this regard.
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