Tianneng Power International (00819.HK) announced on the Hong Kong Stock Exchange after trading hours on October 30 that Tianneng New Materials, its indirect non-wholly owned subsidiary, entered into an equity transfer agreement with Tianchang Holding and Anhui Xinna on the same day: Tianneng New Materials has agreed to acquire, and Tianchang Holding has agreed to sell, a 50.10% equity interest in Anhui Xinna for a consideration of approximately RMB 150.3 million. The consideration involves no cash payment and will be satisfied by Tianchang Holding subscribing for new registered capital in Tianneng New Materials.
Anhui Xinna is mainly engaged in the research and development of battery cathode materials, with accumulated technical expertise and R&D experience in sodium-ion battery cathode materials and lithium iron phosphate cathode materials. Prior to the transaction, Anhui Xinna was owned as to 90% by Tianchang Holding and 10% by Hexian Fenghe. Upon completion, Tianneng New Materials will hold 50.10% of Anhui Xinna, which will become a subsidiary with its assets and liabilities consolidated into the group's financial statements, while Tianchang Holding's stake in Tianneng New Materials will rise to approximately 33.35%, an increase of about 8.35 percentage points.
Tianneng New Materials is currently engaged in the recycling and comprehensive utilisation of spent lithium-ion batteries. According to the announcement, the transaction will complement its existing business with Anhui Xinna's cathode material technology, broaden the group's technical capabilities along the battery recycling value chain and enhance its processing capacity.
As Tianchang Holding is owned as to 98% by Dr. Zhang, the controlling shareholder and an executive director of Tianneng Power, the transactions constitute connected transactions under Chapter 14A of the Listing Rules. With all applicable percentage ratios below 5%, the transactions are subject to reporting and announcement requirements but exempt from the circular, independent financial advice and independent shareholders' approval requirements. The capital increase will also dilute the group's equity interest in Tianneng New Materials from 75% to approximately 66.65%, constituting a deemed disposal under the Listing Rules.