Zongshen Power Plans Major Asset Restructuring, Company Stocks Remain Unhalted!

No trading halt.

Zongshen Power (001696) announced on the evening of February 13 that the company plans to exchange its assets and liabilities related to the motorcycle engine business (centered on the equity of Chongqing Zongshen Engine Manufacturing Co., Ltd.) with the assets and liabilities related to the general machinery business held by Loncin Holdings Co., Ltd. (referred to as “Loncin General,” stock code: 603766) (centered on the equity of Chongqing Xinlongxin Electromechanical Co., Ltd.), with the difference in the transaction price to be made up by one party to the other in cash (referred to as “this transaction”). The company’s stock will not be suspended during this transaction.

According to preliminary research and estimates, this transaction is expected to constitute a major asset restructuring as defined by the “Administrative Measures for Major Asset Restructuring of Listed Companies.”

The specific scope of the assets involved in this transaction will be further clarified and determined by the parties in the transaction plan after due diligence, auditing, and valuation are completed. The transaction price will be based on the valuation report issued by an evaluation agency that complies with the provisions of the Securities Law of the People’s Republic of China, and will be negotiated and determined by the parties.

In addition, this transaction is still in the planning stage. The transaction plan requires further discussion and consultation, and necessary decision-making and approval procedures must be carried out in accordance with relevant laws, regulations, and the company’s articles of association. The company has not yet signed a letter of intent with the counterparty for this transaction.

Zongshen Power stated that this transaction aims to resolve the competition issues between the company and Loncin General, and to promote both parties toward clearer and more specialized business development. After the completion of this transaction, the company will focus resources on developing core businesses with technological advantages and market prospects, such as general machinery, further strengthening its main business layout and optimizing asset and resource allocation. This transaction aligns with the company’s strategic development direction, helps improve the quality of the listed company, and effectively protects the interests of small and medium shareholders.

(Source: Securities Times)