After receiving the letter of concern, the 15.9 billion yuan fixed increase project of Tianqi Lithium Industry was announced to be terminated.

A few days ago, after Tianqi Lithium Group, a major shareholder of Tianqi Lithium Industry, disclosed its plan to reduce its holdings, Tianqi Lithium Industry once again put forward a plan to increase the latter by 15.9 billion yuan at a discount. The next day, I received a letter of concern from the exchange, asking it to reply whether it constitutes a substantive short-term transaction and other issues. In this regard, people related to the company said that it is impossible to reply for the time being, and everything is subject to the announcement.

Clinker, within a short period of 2 days, Tianqi Group's massive capital injection was announced to be over. Tianqi Lithium Industry announced on the evening of January 17 that in view of the fact that the controlling shareholders implemented a share reduction plan in the early stage to support the development of the company, in order to avoid any risk that the continued promotion of this non-public offering may lead to substantial short-term trading, from the point of view of comprehensively and effectively protecting the interests of medium and small investors, the company has carefully analyzed and repeatedly communicated with intermediary agencies. Decided to terminate the non-public offering of A-shares.

It is worth noting that after the failure of the above order increase, the company will continue to face tremendous debt repayment pressure. It is understood that as of September 30, 2020, the company had borrowed 3.132 billion yuan in short-term loans, 13.305 billion yuan in non-current liabilities due in one year, 13.026 billion yuan in long-term loans, and 2.026 billion yuan in bonds payable. The financial expenses for the last three years and the first period were 55 million yuan, 471 million yuan, 2.028 billion yuan and 1.286 billion yuan respectively. At the end of 2017, 2018, 2019 and September 2020, the asset-liability ratio was 40.39%, 73.26%, 80.88% and 81.27%, respectively.

As for the impact of this matter on the company, the company said that at present, all business operations are normal, and the termination of the non-public offering will not affect the company's operation and sustained and stable development, nor will it affect the company's established strategy and the introduction of strategic investors at the Tianqi Lithium Energy Australia Pty Ltd level of the company's wholly-owned subsidiaries. In view of the company's current high asset-liability ratio, the company will actively evaluate and continue to carry out refinancing in accordance with the relevant refinancing policies. Therefore, the termination of the non-public offering does not harm the interests of the company and all shareholders, especially minority shareholders.

Data show that on the evening of January 15, Tianqi Lithium Industry launched a plan to increase the major shareholder Tianqi Group or its wholly-owned subsidiary by 15.926 billion yuan per share. Before the announcement of the fixed increase plan, Tianqi Group disclosed that it planned to reduce its holdings by 51.08 million shares in the six months from January 29, 2021, accounting for 3.4582% of the company's total shares. The reason for the reduction of Tianqi Group's holdings is to provide financial assistance and other capital needs to Tianqi Lithium Industry.