Jiangsu Lopal Tech. Group (02465) subsidiary intends to sell 76% equity interest in the Indonesia Phase II lithium iron phosphate cathode materials project

Jiangsu Lopal Tech. Group (02465) announced that on October 22, 2026, LBM AP (an indirect non-wholly-owned subsidiary of the Company) intends to sell a 76% equity interest in PT LBM Energi Baru to Kinetiq for a total consideration of US$31.92 million. Upon completion, the buyer will hold 76% of the issued shares of the target company, while the Group will hold 24% of the issued shares of the target company through the seller and LBM SG. In connection with the share purchase agreement, on October 22, 2026, LBM AP, LBM SG, Kinetiq and the target company have entered into a shareholders' agreement, which will take effect from the completion date. Pursuant to the shareholders' agreement, Kinetiq has been granted a put option. At any time during the put option period, upon the occurrence of the put exercise conditions, Kinetiq may require LBM AP to purchase all (and not only part) of the put shares at a put price of not less than US$36 million. The announcement stated that the Company intends to use the net proceeds from the disposal as general working capital of LBM AP to support its daily operations and general corporate purposes. The Board believes that using the net proceeds as working capital of LBM AP will strengthen the financial position of LBM AP and enhance its liquidity and operational flexibility. As the Group's aggregate shareholding will be below the 25% threshold under the OBBBA, the target company is expected to cease to be a PFE and maintain non-PFE status. Under the current US policy restrictions, this adjustment is the most feasible option currently available to the Company and is necessary and reasonable. The disposal will also enable the Group to realize part of its investment in the target company. As the Group will retain its aggregate 24% equity interest in the target company, it will continue to benefit from the future growth and development of the target company's lithium iron phosphate cathode materials production facility in Indonesia. It is reported that the target company is principally engaged in the research, production and sale of lithium iron phosphate cathode materials. The relevant asset of the disposal is the Indonesia Phase II plant, namely the 90,000-tonne lithium iron phosphate cathode materials production facility in Indonesia developed by the target company.