Gelonghui September 27?Xingda International (01899.HK) noticeOn 27 September 2023, Jiangsu Xingda, an indirect non-wholly owned subsidiary of the Company, entered into an investment agreement with Huaqin Rubber relating, among other things, to the establishment of a joint venture company, non-cash capital injection into the registered capital of the joint venture company and the operation and management of the joint venture company affairs. The joint venture company will mainly be engaged in the manufacture of steel cord related to the framework material of radial tire.
According to the investment agreement, the total investment of the joint venture company will be 600 million yuan, of which 60% will be funded by Jiangsu Xingda for production equipment and 40% by Huaqin rubber for land and factories.
Huaqin Rubber is a company founded in China, mainly engaged in rubber production business, while involved in power generation, new energy, metal products, real estate development and capital operations and other businesses. To the best of the Directors' knowledge, knowledge and belief, the ultimate beneficial owners of Huaqin Rubber are Niu Teng and Niu Yishun.
The Group is mainly engaged in the production and trade of radial tire steel cord, bead steel wire and other steel wires. Drawing on the Group's technical and expertise in the production of steel cord for radial tyres and the ability of Huaqin Rubber to provide suitable locations for the production of steel cord related to the skeleton material of radial tyres, it is expected that the establishment of a joint venture company will produce business synergy between the Group and Huaqin Rubber. In addition, the JV Company is expected to strengthen the Group's production capacity, broaden its revenue base and expand its business scope in China.