Zitong Financial App News, Enlightenment International (00872) issued a notice regarding the establishment of a joint venture in Germany for the vehicle millimeter wave radar business and the related shareholder agreement, the company Kymati GmbH established under the shareholder agreement. (joint venture company) approximately 75.28% of the equity is held by the Group through Dongpei Limited, an indirect wholly-owned subsidiary of the company after its establishment.

The joint venture company is a limited company established in Germany. Since the formation of the JV Company, the Group has contributed approximately 18821 euros and 1.36 million euros to subscribe for shares in the JV Company as an additional capital injection into the equity reserves of the JV Company.

Based on the unaudited financial statements and unaudited management accounts of the JV Company, the JV Company made a net operating loss of approximately 149000 euros and approximately 772000 euros for the year ended 31 December 2018 and the 11 months ended 30 November 2019, respectively.

Taking into account the financial performance of the JVCo (including the continuing net loss since its incorporation and is not expected to recover in the near future) and the growth potential of the JVCo, the company considers that it is in the best interests of the Group not to make any additional capital contribution to the JVCo; and in December 2019, the shares held by Dongpei were compulsorily redeemed in full in accordance with the terms of the shareholders' agreement. Since the completion of the redemption, the joint venture company has ceased to be a subsidiary of the company, and the assets, liabilities and operating results of the joint venture company have been no longer consolidated into the company's consolidated financial statements.

It is estimated that the company will record an impairment loss of approximately HK $4.7 million on redemptions, which is equivalent to the unaudited net asset value of JVCo as at 30 November 2019.

In addition, the company considers that the redemption does not have any material adverse impact on the financial position or operation of the Group.