Harson Trading (China) Co. (603958.SH) terminates major asset restructuring and acquires the controlling rights of Suzhou Langkes and Jiangsu Langxun with 358 million yuan.

Harson Trading (China) Co., Ltd. (603958.SH) announced that, due to the confidence in the development prospects of the precision metal structural components and related equipment business of Suzhou Langkesi Precision Hardware Co., Ltd. ("Suzhou Langkesi") and Jiangsu Langxun Industrial Intelligent Equipment Co., Ltd. ("Jiangsu Langxun"), the company hopes to acquire a controlling stake in Suzhou Langkesi and Jiangsu Langxun ("Target Companies") through cash payment, integrate the business into the company system as soon as possible, and quickly complete the integration work of the Target Companies, to support the company's industrial transformation and industrial layout. It is reported that, compared to the transaction plan prior to this change, which involved issuing shares to acquire 87% of Suzhou Langkesi's equity, 90% of Jiangsu Langxun's equity, and 23.0769% of Suzhou Yeyu Enterprise Management Partnership Enterprise (limited partnership) ("Suzhou Yeyu") and raising supporting funds, the current plan involves acquiring 45% of Suzhou Langkesi's equity and 55.2% of Jiangsu Langxun's equity in cash. This allows the company to retain the equity of some shareholders of the Target Companies while controlling the Target Companies, which is beneficial for the Target Companies' operation and management. At the same time, it reduces the goodwill amount, which helps control the company's financial risk. Furthermore, compared to the previous transaction plan, this change reduces the percentage of acquired equity, decreases the transaction targets and amount, changes the payment method from issuing shares to cash acquisition, and cancels the raising of supporting funds, resulting in the revised transaction plan not constituting a major asset restructuring. This led to the company terminating the major asset restructuring, i.e., terminating the original issuance of shares to purchase assets and raise supporting funds. After negotiation, the company plans to pay a total of 358 million yuan in cash to acquire 45% of Suzhou Langkesi's equity and 55.2% of Jiangsu Langxun's equity. Upon completion of this transaction, the company will control 55% of Suzhou Langkesi's equity and 65.2% of Jiangsu Langxun's equity.