Zitong Financial APP News, Ronghui International (00990) issued a notice that on August 20, 2021, Yihuang, a wholly-owned subsidiary of the company, entered into a joint venture agreement with Zhongtian Iron and Steel, Shanxi Jinnan and Yongfeng Group for the establishment of a joint venture. The parties agree to set up a joint venture to invest mainly in ferroalloy related projects in China.
According to the joint venture agreement, after its establishment, the joint venture will be owned by 51%, 20%, 20% and 9% respectively by the company, Zhongtian Iron and Steel, Shanxi Jinnan and Yongfeng Group. The registered capital of the joint venture is expected to be RMB 1 billion (the same as below). The total contribution of Yihuang will be 510 million yuan, Zhongtian Iron and Steel will be 200 million yuan, Shanxi Jinnan will be 200 million yuan and Yongfeng Group will be 90 million yuan. All contributions will be made in cash.
Apart from focusing on its existing business, the group has been exploring possible investment opportunities from time to time to diversify its business and broaden its sources of income to ensure sustainable growth, the announcement said. In China, in particular, there is sustained demand for commodities and plenty of business development opportunities. The purpose of this joint venture is that the group adheres to the principle of "reducing carbon and increasing efficiency" and the concept of "digital intelligence and heavy foundation", looks forward to the future ESG direction of the iron and steel processing industry, establishes an operating platform, invests in Chinese mainland's ferroalloy enterprises, promotes the development of intelligence and automation in the ferroalloy industry, and carries out the future combined trade of ferroalloy products (including silicon, manganese and chromium, etc.). Strive to become one of the most competitive enterprises in Chinese mainland ferroalloy industry in the future. The joint venture may supplement the existing and future business of the Group in China.
In addition, through the establishment of a joint venture, the parties to the joint venture will be able to complement each other's strengths and share resources, which is conducive to the business development of the joint venture. The board of directors expects the joint venture to enhance the profitability of the group in the future.