Zhitong Financial App News, China National Building Material (03323) announced that on June 29, 2022, Sinopec (a non-wholly-owned subsidiary of the company) entered into a capital increase agreement with the company, Sinopec Group, General Institute of Building Materials, Beixin Building Materials and Wang Defang. Sinopec Group, General Institute of Building Materials, Beixin Building Materials and Wang de Fang agreed to increase capital in accordance with RMB 4.69 yuan of ╱ registered capital for Sinopec Hi-tech, with a total capital increase of about RMB 979 million. After the completion of this capital increase, the registered capital of Sinopec Hi-tech will increase from 167 million yuan to 376 million yuan. The high-tech shares held by the company, Sinopec, General Institute of Building Materials, Beixin Building Materials and Wang Defang will be about 44.33%, 26.56%, 28.35%, 0.41% and 0.35%, respectively.
According to the capital increase agreement, Sinopec agreed to increase its capital in the form of debt-to-equity swap with its claim on Sinopec Hi-Tech, with a capital increase of about RMB 345 million. Sinopec's creditor's rights of RMB 345 million to Sinwood Hi-Tech were changed to the payment of CNM Hi-Tech RMB 73.6109 million registered capital, and the excess of the registered capital was included in Sinopec's capital reserve. In addition, Sinopec agreed to increase its capital by 123 million yuan in cash, of which 26.2073 million yuan will be included in the registered capital of Sinopec Hi-Tech, and the remaining amount will be included in Sinamak's capital reserve.
Beixin Building Materials agreed to increase its capital by transferring its 41% equity stake in the company to Sinopec Hi-Tech, with an increase of RMB 7.3418 million yuan, of which RMB 1.5643 million yuan is included in the registered capital of Sinopec High-tech, and the remaining amount is included in the capital reserve of Sinopec High-tech. As of the evaluation base date, the evaluation value of 41% of the equity (based on the asset-based method) is RMB 7.3418 million, and has been filed with the parent company.
At the same time, Sinopec will sign an equity transfer agreement with the General Institute of Building Materials. According to the agreement, Sinopec will transfer its 26.56% stake in High-tech of China Materials to the General Institute of Building Materials for free, thus making the General Institute of Building Materials the controlling shareholder of China Materials Hi-Tech, holding about 54.91% of its equity. Accordingly, Sinamak High-tech will no longer be a subsidiary of the company, but will become an associate of the company.
The announcement said that this capital increase will reduce the percentage of the company's equity directly and indirectly in Sinamak from about 99.65% to 44.74%. Therefore, it constitutes a sale under rule 14.29 of the listing rules.
It is reported that Sinopec Hi-tech is mainly engaged in the production and R & D of ceramic and crystal materials widely used in electric power, new energy, environmental protection, information, aerospace and other fields.
The announcement said that the General Institute of Building Materials and Sinomaterials Hi-Tech have good cooperation experience in tackling key scientific research problems, industrial coordination, and personnel training, especially in the field of advanced ceramic new materials, with a profound cooperation foundation, broad cooperation space and synergy effect. Through this capital increase and share expansion, Sinamak Hi-tech will make use of the industrial platform of China National Building Material Group and cooperate with the favorable resources of new materials in China National Building Material Group to achieve its rapid development in the field of new materials. After the completion of this capital increase, the company, as the second largest shareholder of Sinopec High-tech, can fully enjoy the dividend generated by the high growth of Sinopec's high-tech business in the future.