Reorganization plan rejected, Hongli Optoelectronics acquires Smede for 170 million cash

Hongli Optoelectronics announced on the evening of the 13th that the company has recently received a decision from the China Securities Regulatory Commission not to approve the company’s issuance of shares to purchase assets and raise supporting funds from Anmaoling and others. With the failure of the restructuring plan, the company decided to acquire Smede in all cash. Regarding the reason for the rejection, the M&A and Reorganization Committee believed that the change in the equity of the target assets and its disclosure were unclear and did not comply with the provisions of Article 10 (4) of the "Measures for the Administration of Major Asset Reorganizations of Listed Companies". According to the investigation, this provision is that the ownership of assets involved in major asset restructuring is clear, there are no legal obstacles to the transfer or transfer of assets, and the relevant claims and debts are handled legally. Regarding the specific reasons for the rejection, the company did not provide any further explanation in the announcement. According to the announcement, it was confirmed that the company's board of directors decided to terminate the reorganization of acquiring 100% of the equity of Smed from natural persons such as An Maoling through a combination of issuing shares and paying cash, and changed it to acquire all shares in cash, and the purchase price was reduced by 10 million yuan (i.e. 170 million yuan). Yesterday (13th), the listed company signed an "Equity Transfer Agreement" with all the shareholders of Smed, namely An Maoling, Li Jundong, Liu Wenjun and Zhang Mingwu, and purchased 100% of the equity of Smed for 170 million yuan in cash. Among them, An Maoling’s 72% stake in Smede was priced at 122 million yuan, and the 28% stake in Smede held by Li Jundong, Liu Wenjun and Zhang Mingwu was priced at 48.4792 million yuan. The company will use its own funds and bank loansPay the cash required for this transaction. The counterparty promises that the net profits achieved by Smed in 2014, 2015 and 2016 will be no less than 28 million yuan, 32 million yuan and 35 million yuan respectively. The company stated that after the completion of this transaction, Hongli Optoelectronics' total assets, operating income, equity and net profit attributable to shareholders of the parent company will be significantly improved. Compared with the previously rejected fixed-increase plan, the company originally planned to purchase the total 100% equity of Smede legally held by An Maoling, Li Jundong, Liu Wenjun, and Zhang Mingwu through a combination of issuing shares and paying cash.