Gelonghui July 25?China Shupa (08623.HK) announced that on July 25th, 2023, Yaan Baosheng Metal Materials Co., Ltd. (the "potential seller", a limited liability company incorporated in China and an indirect non-wholly owned subsidiary of the Company) entered into a non-legally binding memorandum of understanding with Taizhou Heyu New Materials Technology Co., Ltd. (the "potential Purchaser").
Under the MOU, the potential seller intends to transfer and the potential buyer intends to undertake, among other things, all equipment (including any liabilities attached to it), plant and labour ("potential sale") relating to the production of aluminum casting and rolling rolls and aluminum foil by the potential seller.
The Group is a regional wire and cable manufacturer and supplier with integrated production facilities in Chengdu and Guangyuan, Sichuan Province, China. The potential seller is mainly engaged in aluminum casting and rolling processing and aluminum foil manufacturing, and operates a production plant in Ya'an, Sichuan Province, China.
In view of the options adopted by potential buyers for preliminary negotiations on potential disposal, and taking into account the unsatisfactory performance of potential sellers and the aluminum recovery industry in recent years, the Board is convinced that the MOU will provide the Group with a more effective use of assets, and reduce the Group's debt ratio and debt cost, thereby improving the Group's financial position. The Board considers that the MOU is entered into by potential vendors and potential purchasers on normal commercial terms after fair negotiations and is in the interests of the Company and its shareholders as a whole.