Gelonghui July 31International Business settlement (00147.HK) announced that on July 28, 2023, the company, Hong Kong Youkang (an indirect non-wholly-owned subsidiary of the company), the target company (Fujian Youyoukang Optical Co., Ltd., a direct wholly-owned subsidiary of Hong Kong Youyoukang) and 688050.SH ("Investor") entered into a capital injection agreement under which investors have conditionally agreed to inject RMB 175 million (which can be adjusted downwards). To subscribe for the additional registered capital of the target company of US $23.5477 million (approximately 36.8421% of the equity of the target company after the first completion on a fully diluted basis).
The target company is mainly engaged in R & D, manufacturing and sales of soft contact lenses and optometry products in China.Under the capital injection agreement, the target company grants the investor a put option under which, within 90 days after the first completion date, the investor has the right to require the company, Hong Kong Youkang and ╱ or its designated third party to jointly purchase shares in the target company held by the investor at the exercise price within 90 days after the first completion date.
At the same time as the capital injection agreement was concluded, the company, Hong Kong Youkang, the target company and the investor entered into the first equity transfer agreement, under which Hong Kong Youkang has conditionally agreed to sell. Investors have conditionally agreed to buy the first batch of sales shares (accounting for about 14.1579% of the target company after the first completion on a fully diluted basis) at a consideration of RMB 70.0816 million (which can be adjusted downwards). Immediately after the first completion, the registered capital of the target company will increase from US $30 million to US $63.9152 million, the target company will be owned by Hong Kong Youkang and investors by 49% and 51% respectively, and the target company will no longer be a subsidiary of the company. and its financial results will no longer be incorporated into the group's financial statements.
In addition, Hong Kong Youkang plans to adopt an equity incentive scheme to recognize participants' past contributions to the equity incentive scheme. In order to implement the equity incentive scheme, Hong Kong Youkang and its employee shareholding platform entered into a second equity transfer agreement on July 28, 2023, under which Hong Kong Youkang has agreed to sell. The employee shareholding platform has agreed to buy a second batch of sales shares (accounting for about 15 per cent of the target company after the first completion) as incentive shares at a consideration of RMB 15.5 million.