HEC Technology subsidiary secures capital increase, new investor for 700m yuan

Guangdong HEC Fluoride Co., Ltd., a controlled subsidiary of Guangdong HEC Technology Holding, will increase its registered capital by 10,888,889 yuan. This capital increase will be fully subscribed by Xinyin Financial Asset Investment Co., Ltd. for a total consideration of 700,000,000 yuan. Following the transaction, Guangdong HEC Technology Holding and its subsidiary, Guangdong HEC Electrochemistry Co., Ltd., will waive their preferential subscription rights.

Post-investment, Guangdong HEC Technology Holding’s direct and indirect equity stake in Guangdong HEC Fluoride Co., Ltd. will adjust from 100.0000% to 96.9828%. The company will retain its position as the controlling shareholder, maintaining effective control over the subsidiary. The registered capital of Guangdong HEC Fluoride Co., Ltd. will rise from 350,000,000 yuan to 360,888,889 yuan. The transaction, valued at 22,500,000,000 yuan before the capital increase, will result in a post-investment valuation of 23,200,000,000 yuan.

The capital increase proceeds will be primarily used by Guangdong HEC Fluoride Co., Ltd. to repay intercompany loans to the controlling shareholder. This move is expected to strengthen Guangdong HEC Fluoride Co., Ltd.'s capital structure, reduce its asset-liability ratio, and support its high-quality sustainable development, aligning with the company's long-term strategic plans and overall shareholder interests.