Honghua Group (00196) issued an announcement. On December 12, 2023, the seller Honghua Holdings (one of the companies...
According to the Zhitong Finance App, Honghua Group (00196) announced that on December 12, 2023, the seller Honghua Holdings (a wholly-owned subsidiary of the company) and the buyer Dongfang Electric Investment signed an equity transfer agreement. The seller agreed to sell sales shares to the buyer, equivalent to the total registered capital of the target company Honghua Financial Leasing (Shanghai), at a total cost of RMB 199 million. Upon completion of the sale, the Group will no longer have any interest in the target company.
The Group can monetize the target company's assets through sales, increase its working cash flow by about RMB 200 million, accelerate its capital turnover, and better support its transformation, upgrading and development. At the same time, this stock transfer can also inject liquidity into the Group as soon as possible, improve asset structure, reduce financial expenses, and improve the quality of statements.
This sale will help the Group focus on its main business and keep close to its future continuous business development needs and key industry directions.
Furthermore, the development of the financial leasing industry involved in the target company is driven by a model that uses capital as the basis for operation and a high leverage ratio, but since the seller's current investment capacity is limited, it is difficult to use the target company platform to further expand the scale of business.