Zhongce Rubber Completed Shareholding Right Transfer

On October 23, Hangcha Group and GreatStar declared that they officially became the first majority share-holder of Zhongce Rubber upon the completion of share-holding right transfer after they and their joint controlling shareholder, Giastar Group, purchased 46.95% of shares from Zhongce Rubber.

At the beginning of June this year, Hangcha Group and GreatStar issued a draft on purchasing the shares of Zhongce Rubber. As the “leading role”, Giastar Group, together with its subordinating GreatStar and Hangcha Group, jointly invested in and established Zhongce Haichao Company to invest with 5.8 Billion Yuan in cash in the acquisition of 46.95% of shares of Zhongce Rubber.

In addition, this acquisition involved a “Synergy Performance Commitment”. On September 27, Giastar Group signed another Profit Compensation Supplementary Agreement respectively with those two listed companies. According to the commitment of Giastar Group, the increase of GreatStar’s net profits arising from the synergistic effect of this deal within the profit compensation period shall be no less than 75.4941 Million Yuan in total and the increase of Hangcha Group’s net profits will be 115 Million Yuan. 

Meanwhile, the amount of the investment of the two listed companies shall be lower to 975 Million Yuan respectively, thus the percentage of shares indirectly held by them will be decreased correspondingly.