TradePromotion

Doublestar Group Intends to Introduce Strategic Investors

2020-5-28 14:45:11

I. Basic Information

As a wholly state-owned enterprise, Qingdao Doublestar Group intends to introduce strategic investors through a capital increase and share expansion.

At the end of 2018, the group had total assets and liabilities of RMB 3,676.527 million and RMB 3,303.425 million, and posted revenue and net profit of RMB 33.4052 million and RMB 112 million respectively for the year.

II. Requirements for the Proposed Capital Increase

(I) Conditions for the capital increase

1. Strategic Investor 1: The amount of capital increase shall be no less than RMB 576.1610 million, among which RMB 30.9450 million shall be included in the registered capital; meanwhile, it will accept the transferred equity corresponding to a registered capital of RMB 26.25 million held by existing shareholders at the price of such capital increase, with the floor price for the equity transfer at RMB 488.7454 million.

2. Strategic Investor 2: The amount of capital increase shall be no less than RMB 74.0789 million, among which RMB 3.9787 million shall be included in the registered capital; meanwhile, it will accept the transferred equity corresponding to a registered capital of RMB 3.3750 million held by existing shareholders at the price of such capital increase, with the floor price for the equity transfer at RMB6 2.8387 million.

3. Strategic Investor 3: The amount of capital increase shall be no less than RMB 74.0789 million, among which RMB 3.9787 million shall be included in the registered capital; meanwhile, it will accept the transferred equity corresponding to a registered capital of RMB 3.3750 million held by existing shareholders at the price of such capital increase, with the floor price for the equity transfer at RMB 62.8387 million.

(II) Other conditions

1. A strategic investor shall complete the said capital increase in cash, accept the corresponding transferred equity and pay for the capital increase and equity transfer. After it is determined to be the ultimate strategic investor by the negotiation team, the transaction margin shall be automatically converted to the equity transfer payment, and the investor shall cumulatively pay no less than 50% of the total amount of the capital increase and equity transfer (the “Initial Payment”) the day after the capital increase and equity transfer agreement takes effect (based on the time of remittance by such strategic investor). The money paid shall be preferentially used to pay in full for the equity transfer, while the remaining amount shall be paid within six months before industrial and commercial registration.

2. Each prospective investor can choose and apply for only one of Strategic Investor 1, Strategic Investor 2, and Strategic Investor 3.

3. The governance structure and special agreement upon completion of the capital increase: ①Upon completion of the capital increase and equity transfer, the board of directors shall be re-established according to law and consist of 7 directors, the details of which shall comply with the Agreement on Capital and Share Increase and Equity Transfer. ② Upon completion of the capital increase and equity transfer, the board of supervisors shall be re-established according to law and consist of 5 supervisors, the details of which shall comply with the Agreement on Capital and Share Increase and Equity Transfer. ③ After a strategic investor becomes a shareholder of Doublestar Group, the equity it holds shall not be transferred within five years. Without the approval of the shareholders’ meeting of Doublestar Group, any shareholder shall not mortgage, pledge or transfer the equity it holds in the Group. ④ Qingdao City Construction Investment (Group) Co., Ltd. shall have veto power in the vote for issues concerning the rights and interests of state shareholders at shareholders’ meetings. Non-state shareholders agree that they should not mutually become persons acting in concert.

4. Strategic Investors 1, 2 and 3 shall pay a transaction margin of RMB 212.9813 million, RMB 27.3835 million and RMB 27.3835 million respectively.

III. Eligibility of Strategic Investors

(I) Basic requirements for strategic investors

1. A strategic investor shall be a domestic enterprise established according to law and existing validly.

2. Such investor shall have a good financial condition and payment capacity (a certificate of deposit of no less than 50% of the total consideration for the proposed capital increase and equity transfer issued by a bank or a credit certificate of no less than the total consideration for the proposed capital increase and equity transfer issued by a bank is required), with paid-in capital of no less than RMB 100 million (the accounting voucher for paid-in capital is required); in principle, the net assets of a strategic investor shall be no less than RMB 200 million (the auditor’s report of the previous year or the latest report is required).

(II) Requirements for Strategic Investor 1

Strategic Investor 1 shall meet the development needs of the Company, possess and can integrate the superior resources needed by the Company such as technology, market and capital, help the Company break growth bottlenecks, seize market opportunities, support all its business segments to become stronger, better and bigger ones, and attain world-leading levels.

1. In the area of rubber: Have relatively ample resources and capabilities, facilitate the Company’s strategic cooperation with mainstream automakers (including military vehicle manufacturers), customize or provide tyres that meet individualized needs for all the major automakers and customers (including but not limited to auto tyres, special-purpose tyres and aircraft tyres) and become the strategic supplier of leading carmakers by leveraging the advantages of Doublestar and Kumho Tire.

2. In the area of AI and high-end equipment: ① Help the Company promote the intelligent industry 4.0 plan; ② Introduce AI and robotics technologies, markets and cooperative partners, and support the Company to build a world-leading robot manufacturing base in Qingdao; ③ Bring in high-end equipment technologies, markets and cooperative partners, and support the Company to grow into a world-leading high-end equipment manufacturer.

3. In the area of ecofriendly recycling of waste rubber: Have ample resources and capabilities to support the Company’s development of the business of ecofriendly recycling of waster rubber.

(III) Requirements for Strategic Investors 2 and 3

Strategic Investors 2 and 3 shall meet the development needs of the Company, have raw material resources required to develop its rubber business, technology and market resource advantages in ecofriendly rubber materials or high-end rubber products, to build the synergy effect, help the Company grow its high-end rubber business stronger, better and bigger and attain world-leading levels.

(IV) Strategic Investors shall undertake as follows:

1. They shall have a strong will to support Doublestar’s development and key resources it needs.

2. It is permitted to introduce new partners or strategic investors for the new business segments Doublestar Group develops, and to establish joint ventures (“JVs”) with relevant enterprises affiliated with the Group. The shareholding ratio of Doublestar Group in such JVs shall depend on how much new strategic investors can contribute to such business segments in terms of resource and technology.

3. Strategic investors must undertake to avoid horizontal competition, unless otherwise agreed by the board of directors of Doublestar Group.

4. After a strategic investor becomes a shareholder of Doublestar Group, the equity it holds shall not be transferred within five years. Without the approval of the shareholders’ meeting of Doublestar Group, any shareholder shall not mortgage or pledge the equity it holds in the Group.

5. They shall maintain the relative stability of management and employees, and offer guaranteed contracts for three years.

6. They have learned in detail all the contents of the selection plan, and undertaken to respond thereto after their eligibility for prospective strategic investor is determined.

7. If a strategic investor is established for less than 3 years or unable to prove with ample evidence that it has the key resources needed to support the Company’s development, its controlling shareholder (including without limitation) that meets such conditions, has relevant resources and full performance capacity is required to issue an undertaking in writing and bear joint liability for contract performance by the strategic investor (including but not limited to the Agreement on Capital and Share Increase and Equity Transfer).

Any inquiry about the project, please send the following materials to the email address: tradeinvest@ccpit.org

(1) Company information, including the name, main business, product catalog;

(2) Scanned copy of the business license;

(3) Company contact person and contact information;

(4) The website link of this business opportunity, and your inquiry questions.

Telephone: 010-82217954, 010-82217961 15601107889

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