HL Technology (01087) said it agreed to sell 55%
equity interest in Tianjin Rituo Automotive Electronics to Wang Xiang for a total of
Rmb58.6 million and acquire the entire equity interest in Tianjin Rituo High Technology
from Rituo Automotive for a total of Rmb15 million.
As Rituo Automotive has not been as profitable as expected, the Board wishes to dispose
the automotive wiring harness business engaged by Rituo Automotive but retain Rituo
Technology as a subsidiary of the Group to develop its wholly-owned automotive wiring
harness business.
The Group considers it desirable to retain Rituo Technology as it will supply wires used
for signal transmission on automotive and assist the Group in making a swift entry into
the automotive industry. Through the acquisition, the Group can also utilize its customer
base, together with the Group's existing expertise in signal transmission and connectivity
and its exclusive techniques and capabilities in manufacturing in order to further expand
and strengthen the size and profitability of the Group's new business in automotive signal
transmission wires.
Rituo Technology is principally engaged in design, research and development, manufacture
and sale of automotive wiring harness products and automotive electronics and is wholly
owned by Rituo Automotive. Rituo Automotive is principally engaged in the design, research
and development, manufacture and sale of automotive wiring harness products. (HL)