Chaowei Power inks capital increase pact with Anhui Yongheng

Facilitates business expansion in Anhui, an area with significant development potential in its electric bike market.

Chaowei Power Holdings Limited, a leading electric bike motive battery manufacturer in China, announced that Chaowei Power Co., Ltd.(“Chaowei Power Co.”), an indirect wholly-owned subsidiary of the Group, has entered into the Capital Increase Agreement with Anhui Yongheng Power Technology (“Anhui Yongheng”).

Under the agreement, Chaowei Power Co. will invest RMB 40,139,000 in cash in Anhui Yongheng. Upon completion of the capital increase, Chaowei Power Co. and the original shareholders of Anhui Yongheng will hold 51% and 49% equity interest in Anhui Yongheng, respectively, and Anhui Yongheng will become an indirect non-wholly-owned subsidiary of the Group.

The investment will be used to develop the business of Anhui Yongheng. Upon completion of the capital increase, the Board of Anhui Yongheng will comprise three directors, and Chaowei Power Co. shall be entitled to appoint two directors, including the chairman. Chaowei Power Co. shall consign staff to Anhui Yongheng and provide assistance for its procurement of raw materials and product sales, and technical guidance on production, accoding to a Chaowei report.

Mr Zhou Mingming, Chairman and Executive Director of the Group, said, “Anhui Yongheng is an established lead acid motive battery manufacturer with a current annual production capacity of 1 million units. Its annual production capacity is expected to gradually increase to 9 million units of lead-acid motive batteries. The Group is pleased to obtain a controlling interest in Anhui Yongheng in order to strategically expand its geographical production base coverage to Anhui, an area with significant development potential in its electric bike market. This initiative enables the Group to develop its production facilities in Anhui in a more timely and cost effective manner. The Board of Directors believes that the Group entered into the capital increase agreement will facilitate its future development.”