Fangda Special Steel Plans Major Asset Restructuring to Acquire Control of Steel Enterprise Investment Firm

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Fangda Special Steel announced on the evening of July 21 that it is planning a major asset restructuring. The company intends to negotiate with other partners of Nanchang Huxu Steel Industry Investment Partnership to withdraw from the industrial fund, and through in-kind distribution obtain control of Jiangxi Fangda Steel Group Enterprise Investment Company. This transaction is expected to constitute a major asset restructuring and a related-party transaction, will not involve share issuance, and will not lead to a change in the controlling shareholder or actual controller. However, it is still in the planning stage and subject to significant uncertainty. The company stated that this move fulfills the injection commitment made on July 10, 2023, and helps resolve potential horizontal competition. After the transaction is completed, the company will indirectly control Yunnan Fangda Steel Group Company, Yunnan Fangda Vanadium-Titanium New Materials Company, Sichuan Fangda Vanadium-Titanium Group Company, and Sichuan Hengda Mining Company, significantly increasing production capacity. The target company is a national leader in comprehensive utilization of vanadium resources and, through its equity participation, has entered energy storage businesses such as vanadium redox flow batteries. After the injection, it will drive the transformation of vanadium resources toward high-performance materials and create new profit growth points. The announcement shows that Steel Enterprise Investment is wholly owned by Nanchang Huxu. After Nanchang Huxu reduces its capital, Fangda Special Steel will have a paid-in capital contribution of 3.5 billion yuan, while Shanghai Huxu and Haiou Trading will each have a paid-in contribution of 3 million yuan. Fangda Special Steel will retain its partner status, with its subscribed and paid-in capital contributions reduced by 500 million yuan.

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Planned major asset restructuring to acquire control of Steel Enterprise Investment, fulfilling injection commitment and resolving horizontal competition.

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